NIFTY – Technical Outlook: Long Trades May Prove Risky In The Short Run

The index continued its meandering run, struggling to break past the pivotal 12K mark yet again. The steadily narrowing channel is indictive of a range bound phase for the NIFTY ahead in the medium term. In the short run, the negative momentum on the daily charts may drag the index down by 300-500 points, but that should not be construed as the beginning of a bearish phase for the markets.

Strong resistance appears to have formed at the 12,000 mark. The next support is at 11,600 with a very strong L2 support at 11,000. Long trades may prove risky in the short run as the momentum appears to be weakening on the weekly charts, and a bearish crossover on the weekly stochastic appears to be imminent.

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