As anticipated, the NIFTY faced stiff resistance around the 12K mark last week, and profit booking in large caps dragged the index down by around 300 points.
With a bearish crossover forming on the weekly stochastic oscillator, the medium term trend is expected to continue downwards, till the index hits the middle Bollinger Band which seems to be forming around the 11,300 mark.
In the short run, we have the momentum oscillator on the daily charts entering the oversold zone, and this could result in a technical bounce till around 11,800 before further profit booking creates a drag on the index.
Though the medium-term momentum is negative, we remain in a buy on dips market and the chances of a deep correction below 11,300 remain slim.
Support is expected at 11,300 with resistance at 12,000 levels.
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