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Short-term outlook for the market remains positive: Devang Shah

NIFTY      

CLOSE- 11752.80  (18.04.2019)

The market closed last week in the positive territory. It consolidated in a narrow range for the truncated week and has made a high of 11,856.20 levels on Nifty so far in this rally. There's a high possibility of wave-III of 5 Extension case in short term towards revised higher levels targets. On the other hand, the failure to extend from here will open up the possibilty of consolidation range on Nifty between 11,300-11,800 levels in short term but any kind of decline or consolidation is buying opportunity till short term reverses.

Midcap & small cap indices closed last week in negative territory. It consolidated in narrow range for the week and now has to play catch up now for further confirmation of over all trend of the market. One should closely watch the behaviour of broader market in coming weeks at current levels of market. It looks like high possibility end of this divergence at recent bottom and from now onwards, we will get broader market rally for higher levels targets in short to medium term. And eventually, midcap & small cap indices will also make all-time highs in this calender year. Risk Reward is favourable to BUY stock specific at current levels of market.

BANK NIFTY closed weekly in positive territory. It consolidated in a narrow range for the truncated week. It has made a high of 30,915.70 levels so far in this rally. It also looks like wave-III of 5 extension case on bank nifty in short term. 27,000 levels is a strong support on bank nifty, and till it holds, one can expect higher levels targets till 32,500 levels in short term. On the other hand, the failure to extend from here will open up the possibilty of consolidation range on Bank nifty between 29,200-30,900 levels in short term but any kind of decline or consolidation is buying opportunity till short term reverses. 23,600 levels is strong support for medium term perspectives, and till it holds, one can expect higher levels targets in the range of 34,000 levels on medium term perspectives.

11,500 & 12,000 levels is strong support & resistance levels respectively based on option open interest data for expiry perspectives next week. Any kind of such short term correction or consolidation is stock specific buying opportunity for medium to long term investment perspectives till medium term reverses.

Momentum indicators Daily KST & DAILY MACD  both are in SELL indicating volatality for short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses. Risk Reward is favourable to BUY at current levels of market. Close below short term reversal levels will lead to sharp correction till 10,300 levels on nifty & 34,400 levles on Sensex in short term.

Stock Picks:

CIPLA – BUY
CLOSE – Rs 563.20
TARGET – Rs 585/610

CIPLA closed weekly in positive territory. It is outperforming in short term. Its daily momentum indicators are in BUY. It has managed to hold crucial support of 20 DMA. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 535 for the target of 585/610 levels in short term.

HDFC BANK– BUY
CLOSE – Rs 2,288
TARGET – Rs 2,350/2,400

HDFC BANK closed weekly in positive territory. Its weekly momentum indicators are in BUY. It has managed to hold crucial support of 40 DMA. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 2,225 for the target of Rs 2,350/2400 levels in short term.

JSW STEEL – BUY
CLOSE – Rs 299.30
TARGET – Rs 310/315

JSW STEEL closed weekly in positive territory. Its daily momentum indicators are in BUY. It has managed to hold crucial support of 20 DMA. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 287 for the target of Rs 310/315 levels in short term.

RELIANCE – BUY
CLOSE – Rs 1,384
TARGET – Rs 1,420/1,450

RELIANCE closed weekly in positive territory. It has closed above 20 DMA. Its daily momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 1311 for the target of Rs 1,420/1,450 levels in short term.

JAIN IRRIGATION – BUY
CLOSE – Rs 58.60
TARGET – Rs 64/69

JAIN IRRIGATION closed weekly in positive territory. Its closed above 20 DMA. Its daily momentum indicators are in BUY. Risk Reward is favorable to BUY at current levels. One can buy with a stop loss of Rs 55 for the target of 64/69 levels in short term.

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Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst.

Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.