Weekly market outlook and top stocks that Devang Shah is bullish on

The short-term outlook for the market remains positive till Nifty trades above 10,940 levels and the expected target is in the range of 12,300-12,400 levels.

NIFTY      

CLOSE- 11844.10 (24.05. 2019)

Market closed in the positive territory for the second consecutive week in the week gone by. It has achieved my short term target near recent high as expected last week. It made a high of 12,041 levels. It was highly volatile week due to election events. 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 levels 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 midcap and small cap stocks to outperform. One can’t rule out stock specific action and any kind of decline or consolidation is buying opportunity in specific stocks, till short term reverses. 

Short-term outlook for the market remains positive till Nifty trades above 10,940 levels and the expected target is in the range of 12,300-12,400 levels in short term. Medium-term outlook for the market remains positive till Nifty trades above 9,951 and the expected target is in the range of 12,800-13,200 levels in medium-term.

Mid and small-cap indices ended the week in the positive territory. 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 and 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 of market. Risk reward is favorable to buy specific stocks at current levels of market.

Bank Nifty also closed the week in positive territory. It has also achieved my short-term target near recent high as mentioned last week. It made a high of 31,780 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-wise or price-wise consolidation for short term. 28,570 level is strong support for short term. Hence, till it holds on it, one can expect higher level targets till 32,900 in the short term. Any kind of decline or consolidation is buying opportunity till short term reverses. 23,600 is strong support for medium-term perspective; till it holds the level, one can expect higher level targets in the range of 34,000 on medium-term perspective.

11,500 and 12,000 levels are strong support and resistance levels, respectively based on option open interest (OI) data for expiry perspective this week. We may see market consolidation in this price range for short term. Any kind of such short term correction or consolidation is buying opportunity in specific stocks for medium-to-long term investment perspective, till medium-term reverses. 

Momentum indicators Daily KST & 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 level on Nifty in short term.

Stock Picks:
 

ESCORTS – BUY
 

CLOSE – Rs 638.80
 

TARGET – Rs 665/685

Escorts closed the week in positive territory. It looks like the end of short-term correction. Its daily momentum indicators are in BUY. It managed to close above 20-daymoving average (DMA). Risk reward is favorable to buy the stock at current levels. One can buy with a stop loss of Rs 587 for the target of Rs 665/685 levels in short term.

M&M – BUY
 

CLOSE – Rs 663
 

TARGET – Rs 685/695

M&M settled in positive territory last week. It looks like an end of short-term correction. Its daily momentum indicators are in BUY. It closed above 20-DMA. Risk reward is favorable to buy the stock at current levels. One can buy with a stop loss of Rs 630 for the target of Rs 685/695 levels in short term.

RAYMOND – BUY
 

CLOSE – Rs 855
 

TARGET – Rs 890/925

RAYMOND ended the week on a positive note. It looks like an end of the short-term correction. It has broken out from short-term consolidation pattern. 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 794 for the target of Rs 890/925 levels in short term.

HERO MOTOCORP – BUY
 

CLOSE – Rs 2,832
 

TARGET – Rs 2950/3100

The stock ended the week in a positive territory. It looks like an end of medium-term correction. It closed above 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 2,640 for the target of Rs 2,950/3100 levels in short term.

CUMMINS – BUY
 

CLOSE – Rs 756
 

TARGET – Rs 800

CUMMINS closed the week in positive territory. It looks like end of short-term correction. It managed to hold crucial support of 20-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 716 for the target of Rs 800 levels in short term.

TATA CHEM – BUY
 

CLOSE – Rs 625
 

TARGET – Rs 658/675

TATA CHEM closed weekly in positive territory. It is consolidating in narrow range for short term. It closed above 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 600 for the target of Rs 658/675 levels in short term.
 

=============================
 

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.