NIFTY: CLOSE- 9979.70 (06.10.17)
Market closed weekly in positive territory. It retraced close to 61.8% near recent high in this pull back rally as expected last week. It made a high of 9,989.35 levels on nifty & 31873.76 levels on Sensex so far in this pull back rally. All the other indices such as Nifty Bank, Midcap and Smallcap etc also closed weekly in positive territory in this pull back rally. One should wait for further evidences or short term reversal to finally conclude end of short term correction.
Nifty Bank is still under performing in this pull back rally. Short term trend remains down till it trades below 24,765 levels & expecting targets of around 23,500-23,000 levels in this correction. Overall medium term trend remains still up till it trades above 20,649 levels. These kinds of correction or consolidation are stock specific buying opportunity for medium to long term investment perspectives.
Short-term outlook for the market remains negative till Nifty trades below 10,095 levels and expecting target of 9,640-9,480 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.
Lots of stocks are showing under performance at current levels of market. Participation to rally is declining at these levels of market. It’s not giving me confidence to conclude end of short term correction. Although there is possibility of one bullish case from wave counts perspectives as per chart attached. But it’s not my preferred one at current levels of market till short term reverses. Such kind of under-performance market will not turn out to be stronger bullish market for short term.
9700/9800-10000/10100 levels looks short term support & resistance levels respectively based on option open interest data for this month series so far. Market is going to be volatile ahead of Result season this month.
Momentum indicators Daily KST & daily MACD both are in SELL showing weakness. Close above short term reversal levels will only confirm rally towards higher levels targets of 10400 levels on nifty & 33400 levels on Sensex in short term. One should be stock specific & follow the trend with trail stop loss levels till it reverses.
Stock Picks:
DABUR – BUY
CLOSE – Rs 316
TARGET – Rs 325-330
Dabur closed the week in a positive territory. It has out-performing in short term. It also closed above 20 DMA. Risk reward is favorable to buy at current levels. Its daily momentum indicators are in buy. One can buy with a stop loss of Rs 306 for the target of 325-330 levels in short term.
JSW STEEL - BUY
CLOSE – Rs- 257.40
TARGET – Rs 272
JSW Steel closed the weekly in positive territory. The stock is showing signs of extension in short term. It’s still trading above 20DMA. Risk reward is favorable to buy at current levels.Its daily momentum indicators are in BUY. One can buy with stop loss of 245 for the target of 272 levels in short term.
GODREJ INDUSTRIES - BUY
CLOSE – Rs 601.45
TARGET – Rs 620
Godrej Industries closed weekly in positive territory. It looks like end of short term correction.Its daily momentum indicators are in buy. Risk reward is favorable to buy at current levels. One can buy with stop loss of 583 for the target of 620 levels in short term.
TATA COMMUNICATIONS - BUY
CLOSE – Rs 707.80
TARGET – Rs 730-760
Tata Communications closed weekly in positive territory. It’s out-performing in short term. Its daily momentum indicators are in buy. Risk reward is favourable to buy at current levels. One can buy with stop loss of 687 for the target of 730-760 levels 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