Nifty Technical Outlook: Investors Are Advised To Not Overexpose Themselves To Equities

The bulls heaved a sigh of relief last week, as the bellwether NIFTY index decisively crossed the middle Bollinger Band, a critical resistance level, last week.

The stochastic oscillator, which appeared to be making a bearish crossover last week, made an about turn as well, signalling that momentum is still in favour of the bulls.

Previously, I had anticipated a turnaround in the NIFTY at the critical 10,000 level - we've seen a firm 7.5% rally since that level, with 5 consecutive bullish weeks. I had advised fence sitting investors to begin deploying moneys at those levels.

The middle Bollinger Band was a critical inflection point last week, and now that the index has moved past it decisively, we'll likely see it meandering towards the upper band over the next few weeks, which indicates a further upside of around 200-300 points.

It'll be interesting to see what happens thereafter - that is, will the index continue moving further and make a new high, or will it start dropping the moment it hits the upper band. For now, the latter possibility appears more likely, and a lengthy range bound scenario appears to be on the cards.

Investors are advised to not overexpose themselves to equities at this stage. A judicious asset mix holds the key to investing success over the next 12-18 months.