Markets, particularly large cap index (Nifty/Sensex & Bank nifty) have been consolidating in narrow range since past 4-5 weeks. It still looks like bullish triangular consolidation on daily chart as written earlier in my weekly update as well. One can expect higher levels targets as mentioned below in short term till it reverses. It looks like one more leg on upside for this rally is pending started from around Dec-2016 from wave count perspectives as per weekly chart of these large cap index. One should buy stock specific till trend reverses.
I have seen from earlier experience that till Dow Theory supports holds, one should ride such bill market structure of rally. Because in such kind of liquidity driven rally sometimes stretch further more than expected in short term ahead of fundamental as well before we get one meaningful price wise correction. And we may get such kind of time wise correction or consolidation before final TOP established & final short term targets achieves. Therefore, it’s better to Ride it till it finally reverses in short term.
Short-term outlook for the market remains positive till Nifty trades above 9,685 levels and expecting target of 10,300-10,500 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,968 levels and is expecting targets in the range of 12,000-12,200 levels in medium term.
Broader Market looks started it wave-V of 3 as per monthly chart. I feel it will continue to outperform in this rally in short term. It may create Euphoric phase & sharp rally particularity midcap & Small cap stocks in short term & Large cap index will catch up it once it breaks out of this narrow range in short term.
Nifty Bank also closed weekly in negative territory. It’s also consolidating in narrow range in short term. It also still looks like one more leg on upside is still pending on bank nifty for short term till it reverses. 23,800 looks strong support for Bank nifty in short term till it holds one can expect higher levels targets till 25,300 levels in short term & 26,500-26,900 levels in medium term.
9,700/10,000 looks strong support & Resistance levels respectively based on option open interest data for short term. Break of this range at either of side will lead to sharp trend in short term.
Momentum indicators Daily KST & daily MACD both are in buy supporting short term trend one should be stock specific & follow the trend with trail stop loss levels till it reverses from trading perspectives. Close below short term reversal levels will lead to possible sharp price wise correction till 9,500/9,480 levels on Nifty & 30,900/30,680 levels on Sensex in short term.
L&T – BUY
CLOSE – Rs 1172.30
TARGET – Rs 1250/1300
L&T closed the weekly in a positive territory. It has completed short term correction/Consolidation. It managed to hold 200 DMA. Risk reward is favourable to buy at current levels. Its Daily Momentum indicators are in BUY. One can buy with a stop loss of Rs 1135 for the target of 1250/1300 levels in short term.
HDFC BANK - BUY
CLOSE – Rs- 1788
TARGET – Rs 1820/1840
HDFC BANK closed weekly in positive territory. It looks like end of short term consolidation. Its momentum indicators are in BUY. Risk reward is favorable to buy at current levels. One can buy with stop loss of 1740 for the target of 1820/1840 levels in short term.
ASAIN PAINTS- BUY
CLOSE – Rs 1202
TARGET – Rs 1230/1240
ASAIN PAINTS closed weekly in positive territory.Its outperforming in short term. Its Daily momentum indicators are in BUY.Risk reward is favorable to buy at current levels. One can buy with stop loss of 1170 for the target of 1230/1240 levels in short term.
CLOSE – Rs 161.90
TARGET – Rs 168-170
ONGC closed weekly in positive territory.Its consolidating in narrow range in short term.Its daily momentum indicators are in BUY.Risk reward is favorable to buy at current levels. One can buy with stop loss of 155 for the target of 168-170 levels in short term.
CLOSE – Rs 1360
TARGET – Rs 1400-1450
CONCOR closed weekly in positive territory.Its outperforming in short term.Its daily momentum indicators are in BUY.Risk reward is favorable to buy at current levels. One can buy with stop loss of 1290 for the target of 1400-1450 levels in short term.
Devang Shah is the author of www.trendtechno.com (Trade with Trend) and an independent market analyst
: The analyst may / may not have a position in the scrips mentioned above