NIFTY Technical Outlook: 11,000 Is The Next Resistance

As predicted in last week's note, the NIFTY made a strong comeback last week, after having breached the strong technical support of 10,500 intra-week.  The index also made somewhat of a bullish Doji Star on the Candlestick charts, signifying bullishness in the medium term.

In line with our analysts last week, the index surged ahead and made a strong opening this week as well.

While the bulls seem to have wrested the power away from the bears for now, it's not quite time to rejoice as yet. Look at the flatness of the upper and lower Bollinger Bands that are now encapsulating the NIFTY - they are literally parallel to the X Axis now! I would be extremely surprised if we're not at the cusp of an extended range bound phase that will spell consternation for those who are used to achieving linear returns from stocks.


While a 300-350-point upside certainly does exist in the medium term, the party will likely come to an end the moment the NIFTY hits the 11,000 mark. After that, we'll see it trending down again - back to at least 10,500 over the medium term, and most likely 10,000 over the slightly longer term. In other words, this phase is a positional trader's delight!