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Nifty
CLOSE- 8693.05 (22.10.16)
Market closed weekly in positive territory. It managed to hold short term support of 8500 levels & sharply bounced back from these levels after achieving short term targets levels as expected. It made a low of 8506 levels. It made sharp “V” shape recovery so far from these lower levels. It also closed near breakout levels which is coincide with short term reversal levels as well from bullish flag kind of consolidation pattern as per daily chart. One should watch out market behaviour around these levels to finally conclude short term reversal. All the other indices such as midcap, small cap & Bankex etc closed weekly in positive territory.
It looks end of complex correction in wave-IV & Possibility of final wave-V UP from overall wave count & Medium term perspectives as per daily chart. Able to hold short term support near 8500 levels is a very good sign from medium term perspectives. One should BUY stock specific at current levels till this support holds.
Short term outlook for the market still remains negative till Nifty trades below 8746 levels. Sustain above these levels will finally confirm short term trend reversal & Medium term outlook for the market remains positive till Nifty trades above 8294 levels & expecting targets in the range of 9400-9700 levels in medium term.
BANK Nifty also managed to hold medium term support near recent lows & sharply bounced back from these levels. It made a low of 18872 levels. It also looks like end of complex correction on bank Nifty. It has already broken out of bullish flag kind of consolidation pattern as per daily chart & confirmed short term reversal ahead of main index (i.e. Nifty & Sensex). One should expect higher levels targets of around 21000-21500 on bank Nifty in short to medium term.
FII data are showing unwinding of long positions in this short term correction. Further build-up of long positions will be an additional confirmation of short term reversal at current levels of market. 8500/8600 looks strong support & 8800 looks strong resistance based on option open interest data for this month’s expiry next week.
As expected earlier, reiterating once again that broader market will continue to outperform compare to main index in rally ahead & it’s very strong sign as current levels of market from overall medium term view of market.
Momentum indicators Daily KST & Daily MACD both came in to BUY today. One should watch out short term reversal levels to finally conclude trend reversal. Sustain above short term reversal levels will confirm further rally towards 9120-9200 levels in near term. One should buy stock specific & follow trend with trail stop loss levels till it reverses in short term.
Stock Picks:
SBI-BUY
CLOSE-258.50
Target-271/289
SBI closed daily in positive territory. Its looks like end of short term correction. It has managed to hold medium term support levels. Risk reward is favourable to BUY at current levels. One can BUY with SL-244 for the target of 271/289 in short term
TECH MAH-BUY
CLOSE-434
Target-460/480
TECH MAH closed daily in positive territory. Its looks like end of short term correction. It managed to hold medium term support levels. Risk reward is favourable to BUY at current levels. One can BUY with SL-418 for the target of 460/480 in short term
BPCL -BUY
CLOSE-668
Target-686/706
BPCL closed daily in positive territory. It’s outperforming in short term. It looks like end of short term correction. It has still wave-V up pending in short term. Risk reward is favourable to BUY at current levels. One can BUY with SL-640 for the target of 686/706 in short term.
POWERGRID -BUY
CLOSE-177
Target-183/189
POWERGRID closed daily in positive territory. It looks like end of short term correction. Its momentum indicators are in BUY. Risk reward is favourable to BUY at current levels. One can BUY with SL-172 for the target of 183/189 in short term.
Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.
Devang Shah: The author of www.trendtechno.com (Trade with Trend) Consultant & Advisors in the world of Financial Market.
