Top trading ideas by Devang Shah: Buy L&T Finance, Tata Global, Cummins

The short-term outlook for the market remains positive till Nifty trades above 10940 levels.

NIFTY   

   

CLOSE- 11,922.80  (31.05. 2019)

Market closed third consecutive week in the positive territory. It has consolidated in a narrow range for the week with high volatility, as expected. It made a high of 12,039.30 levels during the week.  One needs to watch out market behavior at these crucial levels till these recent high gets surpassed. Close and sustenance above these levels will finally confirm trend towards further higher targets as mentioned below in short-to-medium term.

Short-term wave count structure is still not conclusive but we may see some time or price wise consolidation for short term that may provide some room for beaten down mid and small-cap stocks to outperform. Although, one can’t rule out stock-specific action but any kind of decline or consolidation is buying opportunity in individual stocks till short term reverses. 

Short-term outlook for the market remains positive till Nifty trades above 10940 levels and we expect targets in the range of 12,300-12,450 levels in short term. Medium-term outlook for the market remains positive till Nifty trades above 9,951 and the expected target in the range of 12,800-13,200 levels in medium term.

Mid and small cap indices closed second consecutive week in positive territory. It has also consolidated in narrow range for the week. It has managed to find support at lower levels and formed higher bottom once again. It looks like Triple bottom formation kind of bullish pattern particularly in NSE MIDCAP & BSE MIDCAP index. It has to catch up now for further confirmation of overall trend of the market. One should closely watch out broader market behavior in coming weeks at current levels. Risk reward is favorable to BUY individual stocks. 

BANK NIFTY also closed third consecutive week in the positive territory. It has also consolidated in narrow range with a high volatility for the week. It made a high of 31,815.50 levels. Close and sustenance above these levels will finally confirm trend towards further higher levels targets as mentioned below in short to medium term. We may see some time or price wise consolidation for short term. 28,570 level is strong support for short term. Till it holds on it, one can expect higher targets till 32,900 levels. Any kind of decline or consolidation is buying opportunity till short term reverses. 23,600 level is the strong support for medium-term perspectives; till it holds that level, one can expect higher levels targets in the range of 34,000 levels on medium term perspective.

11,500 and 12,000 levels are strong support and resistance levels. We may see market consolidating in this price range for short-term. Any kind of such short term correction or consolidation is buying opportunity in individual stocks for medium-to-long term investment perspective till medium-term reverses. 

Momentum indicators Daily KST and DAILY MACD both are in BUY supporting short term. One should be stock specific and follow the trend with trail stop loss levels till it reverses. Risk reward is favorable to BUY at current levels of market. Close below short term reversal levels will lead to sharp correction till 10,800/10,400 levels on nifty in short term.

Stock Picks:

L&T Finance Holdings – BUY

CLOSE – Rs 134

TARGET – Rs 139/144

L&T Finance Holdings closed the week in positive territory. It looks like an end of short-term correction. Its daily momentum indicators are in BUY. It managed to close above 20-DMA. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 124 for the target of Rs 139 – Rs 144 levels in short term.

TATA GLOBAL – BUY

CLOSE – Rs 243.55

TARGET – Rs 254/260

TATA GLOBAL closed the week in positive territory. It is outperforming in short term. Its daily momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 228 for the target of Rs 254/260 levels in short term.

CUMMINS – BUY

CLOSE – Rs 791

TARGET – Rs 810/830

CUMMINS closed the week in positive territory. It looks like end of short term correction. It managed to hold crucial support of 20-day moving average (DMA). Its Daily Momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 752 for the target of Rs 810/830 levels in short term.

PETRONET LNG– BUY

CLOSE – Rs 247.60

TARGET – Rs 254/258

PETRONET LNG closed the in positive territory. It managed to hold crucial support of 40 DMA. Its daily momentum indicators are in BUY. Risk reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 238 for the target of Rs 254/258 levels in short term.

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Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst.

Disclaimer:  The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.