Market Outlook:

Last Friday, December 22, 2017, the Nifty (or, interchangeably, the index) posted an all-time-high in terms of both the highest-high and the day’s close till date. This suggests that the market is on a strong momentum. However, the index needs to stay above the 10488-mark for a minimum to move further up. The short-term target for the Nifty would be 10707, and the index would take some time to decisively clear it. In fact, it could well go for a small yet significant correction before it clears the 10707-mark.

One thing, however, is that the index or most of the major stocks haven’t yet given any signal that a major correction or a downturn is just around the corner since the trendiness of the index when seen on longer term charts still seems to be quite strong on the bullish side. Even some of the market internals like the India VIX has once gone after a brief spurt on the upside. None of the index siblings like the Nifty Next, the Nifty 100 or the Nifty 500 are also displaying good enough upward momentum to spoil the mood save a minor blip on the downside for a few days after the Nifty scales up to 10707.

While we should still be playing mostly on the upside yet being acutely aware that the onset of a corrective swing down could just be there anytime. Hence, the position sizing in intraday and/or short-term trades should better be small. However, don’t jump the gun and go short just because you see the index close to the resistance level wait till you get some clear indication that a correction has set in.

We have given below some stocks that are likely to do well both in the short term as well as over the medium to long term. Hence, even if a short-term position were to be converted to a longer duration trade, there won’t be any significant issues save the attendant heartburn that you would, perhaps, suffer as an occupational hazard qua investor/trader.

Stock picks:

Central Depository Services (CDSL) {365.70}:

Buy with a stop-loss below 349 with a target of 397 for the short term. For the medium term, the target would be 440 and for the long term (1 year or more) it would be 517 for now. Medium to long term position traders/investors need not use a stop loss prior to the stock falling below the 300-mark. This is a good stock can be easily kept for the long term since it is still a duopoly in the market of depositories. It will continue to attract business from investors while the market could be in a bull or a bear phase.

Everest Kanto Cylinder (69.60):

Buy this stock with a potential target of about 140 on the upside over the next 12 – 18 months. Short term players should use a stop loss below 59 on the close while the target for them would be 85- 92. Here short term means till the Budget in early February next year. This stock has been on an uptrend over the last three months; however, it still has more tailwind backing it up to push it to scale up to the range between 85 – 92. And the long term as indicated above is really very good. It has been languishing at lower levels below 20 for more than two years.

Ganesh Housing Finance (150):

Buy this stock at current levels and/or also on any decline up to 130 on any correction. Short term target would be anywhere between 175 – 185 while your stop loss should be below 130; medium to long term players should use a stop-loss below 120 on a weekly close basis. The targets for Ganesh Housing for the medium term would be 240, and that for the long term 300.