CLOSE- 8831.55 (23.09.16)
Market closed weekly in positive territory. It’s still consolidating in narrow range. As written last week, we are in time wise consolidation particularly on main Indices (Nifty/Sensex/ Bank nifty) in short term. Midcap & small cap indices closed weekly in positive territory. It’s showing outperformance as expected at current levels of market. As written many times in my weekly note that Midcap & Small cap will continue to outperform in the rally ahead. Reiterating the same thing one again that One should look to BUY particularly stocks from these segments in the portfolio to get the benefit of this rally from medium term perspectives.
As written last week, it looks like phase of wave-IV short term correction or consolidation till short term reverses. One should use this correction or consolidation to BUY for wave-(V) higher levels targets in medium term. We may continue to trade in this range of 8600-9000 levels for some more time before decisive breakout on upside ahead of expiry next week.
BANK NIFTY is also consolidating in narrow range. It also looks like phase of wave-(IV) short term correction or consolidation. 20,650 looks strong resistance for short term & expect targets of around 19000-19100 levels in this short term corrective phase.
Short term outlook for the market remains negative till nifty trades below 8970 levels & expecting targets in the range of 8650-8540 levels in this short term correction. Medium term outlook for the market remains positive till nifty trades above 8294 levels & expecting targets in the range of 9400-9700-10000 levels in medium term.
Momentum indicators Daily KST & Daily MACD both are in SELL supporting short term trend. 8500/8600 looks strong support & 8900/9000 Resistance levels respectively based on derivative option open interest data so far for expiry perspectives for this month series. Sustain above short term reversal levels will confirm further rally towards 9120-9200 levels in near term. One should be stock specific & follow trend till it reverses in short term. At the end I can say that “ IF NOT NOW THAN NEVER”, These kind of short term time wise consolidation or correction is a good opportunity to buy to participate in this rally ahead or else one will repent forever..
IOC is outperforming in short term it’s trading above 40DMA. Its looks like completion of short term correction. One can expect wave-V upward rally in short term. Risk reward is favourable to BUY at current levels. One can BUY with SL-550 for the target of 630 in short term.
DLF closed weekly in positive territory. Its looks like end of short term correction. It has wave-V up pending. Risk reward is favourable to BUY at current levels. One can BUY with SL-147 for the target of 163/169 in short term
BPCL is outperforming in short term it’s closed above 20 DMA. Its looks like end of short term consolidation. Risk reward is favourable to BUY at current levels. One can BUY with SL-580 for the target of 645 in short term.
REC closed weekly in positive 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-237 for the target of 267 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.