NIFTY
CLOSE- 9595.10 (27.05.17)
Market has sharply taken “V” turn recovery from lower levels as expected as per view & closed very strongly at higher levels at the end of weekly trading session. It closed 3rd consecutive week in positive territory. It made low of 9,341.65 levels on nifty & 30,247.60 levels in Sensex this week. We have seen sharp profit booking esp. in midcap & small cap stocks in this week but we have seen just time wise consolidation in main indices such as Nifty, Sensex and Nifty bank during this week, it’s very good sign supporting over all view. Strongly believe that midcap & smallcap indices also completed their short term correction in such mere panic scenario this week. We will continue to see market to trend towards higher levels targets as mentioned below in short to medium term.
As mentioned in my earlier outlook that “TOP never forms with first unwinding in broader market so we are still away from Major TOP & expecting rally to continue further one sided towards short to medium term targets levels till trend reverses. It was just mere Panic in broader market or change in hand in stocks with profit booking by trader. Although we are going to see large cap indices to lead further in rally from here on. Midcap and smallcap indices are going to catch them soon.
From time cycle perspectives, it looks like the rally which started from beginning of January quarter-2017 is going to continue till at least June quarter-2017 as per quarterly analysis. So bulls will dominate for the entire month of June as per this analysis & Nifty will not go below 9,200 levels & we are going to see higher levels target as mentioned below in short to medium term. Any decline or short term consolidation is buying opportunity for short to medium term perspectives till trend reverses.
Short-term outlook for the market remains positive till Nifty trades above 9,269 levels and is expecting target of 9,850 levels in short term. Medium term outlook for the market remains positive till Nifty trades above 8,327 levels and is expecting targets in the range of 10,300-10,700 levels in medium term.
Nifty Bank also started to extend further after end of short term consolidation. It closed weekly in positive territory. It made a low of 22,460 levels. 21,380 is strong support on Nifty Bank till it holds one can expect higher levels target of 23,500 or 25,200 levels in short term. One can expect overall targets of 27
200 levels in medium term.
Reiterating same thing once again that, Dow Theoryis the only simple tool to help to ride such kind extended bull market rally. It worked well in past as well particularly in unchartered territory. Therefore, not to expect major correction in short term till Dow Theory supports hold. We may possibly extend more for couple of months till medium term targets levels without any major correction in such kind of liquidly driven extended bull markets rally beyond fundamentals.
9,200- 9,700 levels in strong support & Resistance levels respectively on Nifty based on derivative option open interest data for current month series. Any kind of short term correction or consolidation is buying opportunity for medium to long term investor. One can expect higher levels targets in medium to long term.
Momentum indicators Daily KST & daily MACD both are in buy supporting short term view. 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 correction till 9,075/9,000 levels on Nifty & 29259/29137 levels on Sensex in short term.
Stock Picks:
NIIT TECH – BUY
CLOSE – Rs 498
TARGET – Rs 540-550
NIIT TECH closed the week in a positive territory. It’s outperforming in short term. Its weekly momentum indicators are in BUY. It also closed above 40 DMA. Risk reward is favourable to buy at current levels. One can buy with a stop loss of Rs 472 for the target of 540-550 levels in short term.
RURAL ELECTRIFICATION CORPORATION - BUY
CLOSE – Rs 204
TARGET – Rs 225
REC closed the week in a negative territory. Its looks like end of short term correction. It also closed above 40 DMA. Risk reward is favourable to buy at current levels. One can buy with a stop loss of Rs 196 for the target of 225 levels in short term.
BATA INDIA - BUY
CLOSE – Rs 536
TARGET – Rs 560
BATA INDIA closed daily in positive territory. Its looks like end of short term correction. Its managed to find support at 40WESM. Risk reward is favourable to buy at current levels. One can buy with stop loss of 515 for the target of 560 in short term.
HDFC - BUY
CLOSE – Rs 1,547.85
TARGET – Rs 1,620
HDFC closed weekly in positive territory. It’s outperforming in short term. Its daily momentum indicators are in BUY. It closed above 40 DMA. Risk reward is favourable to buy at current levels. One can buy with stop loss of 1504 for the target of 1620 in short term.
ACC - BUY
CLOSE – Rs 1,628.75
TARGET – Rs 1,750-1,800
ACC closed weekly in positive territory. It’s outperforming in short term. It looks like end of short term correction. Its weekly momentum indicators are in buy. It closed above 40 DMA. Risk reward is favourable to buy at current levels. One can buy with stop loss of 1570 for the target of 1750-1800 in short term.
Devang Shah: The author of www.trendtechno.com (Trade with Trend) and an independent market analyst
Disclaimer: The analyst may / may not have a position in the scrips mentioned above; the views given above are the personal views of the analyst.Consultant & Advisors in the world of Financial Market.Disclaimer: The analyst may have a position in the scrip mentioned above; the views given above are the personal views of the analyst.