Market may consolidate with volatility: Devang Shah

NIFTY
CLOSE- 8220.80 (03.06.2016)

Market closed 2nd consecutive week in positive territory. It traded in narrow range for the entire this week after breaking out of range above 8000 levels on nifty. It continued short term upwards momentum as expected last week & made a high of 8262 levels on nifty so far in this rally. Market may consolidate with volatility further ahead of RBI Policy event next week but eventually one can expect market to trend towards higher levels targets in short term as mentioned below. Any kind of decline or consolidation is a stock specific buying opportunity till trend reverses.
 
Short term outlook for the market remains positive till nifty trades above 7992 levels & expecting target of 8336 levels in short term. Medium term out look for the market remains positive till nifty trades above 7715 levels & expecting targets in the range of 8640-8844-9120 levels in medium term.

BANK NIFTY closed weekly in positive territory. It’s also outperforming in this rally. One can expect near term target of 18000 levels till it holds support of around 17,069 levels in short term.

Broader market such as Midcap, small cap indices is still underperforming in recent rally compare to main indices. These indices now have to participate in rally to make it further strong. One should watch out its behaviour in short term to take further clue for short term trend.

Momentum indicators daily KST & daily MACD are in BUY supporting short term trend. 8134/8077 levels on nifty are strong support levels for short term. One should BUY stock specific at current levels or any kind of decline or consolidation & follow the trend till it reverses.

Stock Picks:


KOTAK MAHINDRA BANK: BUY

Target: Rs 800

Stop Loss: Rs 745

Kotak Mahindra Bank closed weekly in positive territory. It’s out performing in short term. It started wave-III Up. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with stop loss at Rs 745 for the target of Rs 800 in short term.

ITC: BUY

Target: Rs 370/380

Stop Loss: Rs 349

ITC closed weekly in Positive territory. It’s out performing in short term. Its daily momentum indicators are in BUY. It has Wave-V up pending on up side. Risk reward is favourable to BUY at current levels. One can BUY with SL at Rs 349 for the target of Rs 370/380 levels in short term.

VEDANTA: BUY

Target: Rs113

Stop Loss: Rs 102

Vedanta closed weekly in Positive territory. It started wave-III or wave-C Up. It closed above 20 DMA. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL at Rs102 for the target of  Rs113 levels in short term.


BHARAT ELECTRONICS: BUY

Target: Rs 1200/1250

Stop Loss: Rs 1130

Bharat Electronics closed weekly in negative territory. It looks like end of short term correction. Its daily momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL at Rs1130 for the target of Rs 1200/1250 levels in short term.



The author is Portfolio Manager- PRO TECH-PMS at Sharekhan

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