NIFTY
CLOSE- 7814.90 (13.05.16)
Market failed to sustain at higher levels. It made a high of 7916.05 levels during week in recent rally. I expected possibility of breakout of this range on up side last week in short term but market faced resistance at higher levels & closed below my short term reversal levels of 20 DMA at the end of weekly trading session. It looks like Triangular consolidation in short term on main indices. All the indices including main indices nifty & Sensex closed weekly in positive territory at the end of weekly trading session today.
Market made a lower TOP at recent high as mentioned above indicating possibility of time wise or price wise correction or consolidation to continue further till short term reverses. It has now completely ruled out one more new high possibility above 7992 levels on nifty & 26,100.54 levels on sensex as expected earlier till short term reverses.
It looks like either running triangle or ascending consolidated bullish triangle possibility so far in short term at current levels of market; In that case market will consolidate further in thin range for short term. In case of running triangle 7680-7730 levels is crucial lower end support to watch for short term And in case of ascending bullish triangle 7600-7550 levels to watch out for short term. On the other hand, 7900 looks strong resistance levels for short term.
BANK NIFTY & Broader market is still out performing in short term. One should watch out these indices behaviour in short term to get further clue on overall market. On these indices wave count is still not very much clear at current levels of market.
Short term out look for the market remains negative till nifty trades below 7916 levels & expecting targets in the range of 7730-7680 levels in short term. Sustain below these levels will lead to possibility of correction to extend till 7600-7550 levels in short term. Medium term out look for the market remains positive till nifty trades above 6825 levels & expecting targets in the range of 8336-8560-8650 levels in medium term.
Momentum indicators daily KST & Daily MACD both are in SELL, still showing weakness, supporting short term trend. One should be stock specific & follow the trend till it reverses. Close above short term reversal levels will lead to rally towards 8000-8100 levels on nifty in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses.
Stock Picks:
As Market is trading in narrow range, Would not recommend any trading ideas for this week till we get further confirmation. But this consolidation is good opportunity for investment perspectives. One should look to BUY out performing stocks in their portfolios form medium term perspectives.
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.
