NIFTY
CLOSE- 8088.60 (24.06.16)
Market closed 3rd consecutive week in negative territory. It has finally broken long consolidation pattern of last 2 weeks on down side which has not anticipated on charts till Thursday before final out come of BRE-EXIT. Although momentum was weakening on charts from last 2weeks in these consolidation phase but price confirmation finally got in Fridays trading session. Market opened gap down & made a low of 7927.05 levels on nifty & 25,911.64 levels on sensex in Friday’s trading session. It sharply bounced back from days lows but deteriorated short term bullish set up on charts by hitting intraday to stop loss levels of 7992 level on nifty & 26,080 levels on sensex as mentioned last week. One should be cautious till short term trend reverses.
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From wave count perspectives, It can be taken as ABC pull back rally & wave-X can be over, near recent high of 8285.60 levels ( near 61.8% retracement levels) unless Wave-C extends further as per chart attached of bullish wave counts. Indirectly, it has also raised doubt on medium term view on charts by deteriorating short term set up but will wait for medium term reversal or further confirmation to conclude the same.
Short term outlook for the market remains negative till nifty trades below 8220 levels & expecting targets in the range of 7900-7700 levels. Medium term out look for the market still remains till nifty trades above 7700 levels. BULLS should wait for short term reversal to confirm especially on Nifty at current levels of market.
Bank nifty has also broken intraday my stop loss levels 17,069 levels & deteriorated short term bullish set up. Short term out look for bank nifty remains negative till it trades below 17600 levels & expecting targets in the range of 16,900/16380 levels in short term.
Today’s behaviour of market is creating further doubt on Bullish medium term out look of Bank nifty. It can be also taken as wave-X pull back rally to be over near recent high of 18,026.80 levels (near 61.8% retracement levels) but will wait for further evidences to conclude the same.
All the Indices such as BANKEX, Midcap & Small cap etc closed weekly in negative territory. 8000 & 8300 looks strong support & resistance levels respectively based on derivate option open interest data for this expiry so far.
Momentum indicators Daily KST & Daily MACD both are in SELL supporting short term trend. Market may remain in range between 7900-8200 levels in short term ahead of expiry next week. Sustain above short term reversal levels will only confirm further bullish structure for higher levels targets till 8350-8550 levels in short term. One should be stock specific & follow the trend till it reverses.
Stock Picks:
Market has broken consolidation pattern on down side at the end of weekly trading session & Momentum of the market & Stocks are also weak at current levels of market. But There is no much more clarity on stocks short term out look at current levels of market therefore, I Would not recommend any trading ideas for this week till we get further confirmation.
Infect, I can say that Stock picking is the only art that has given good rewards to Investor in last two & half year of such challenging phase of market. Therefore, one should focus on Outperforming stocks or winning stocks to BUY at this kind of correction from medium to long term perspectives. One may also think to invest in SIP way in out performing stocks or in NIFTY BEES in this corrective phase of market from medium to long 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.
