Nifty likely to trade in 11,500-11,700 range

Where we are: The Nifty has formed a higher base on weekly charts, which is structurally positive and indicates that it could rise up to 11,850-12,250 levels. The Bank Nifty has strong support clusters around 29,600 on the downside, which are likely to provide a cushion in case of declines.



What is in Store: The Nifty has closed above its key averages and faces an immediate resistance at 11,700 on the upside. Any decisive close above that could trigger a rally towards 11,850-12,250. The overall trend remains bullish as long as short-term supports are held. With the emergence of bullish candlesticks on the daily chart and positive crossovers by the momentum indicators, one can expect a shortterm trending action on a decisive close above 11,700.

What could an investor do: We expect the auto sector to show relative outperformance in the coming few weeks as most of the stocks have bounced from their oversold levels and provide a high margin of safety.

Our top picks include M&M, Escorts and Maruti which can give a return of 10-15 per cent. ITCNSE 0.26 % and HULNSE -0.19 % can see a short-term rally of 5-8 per cent as they have witnessed a bullish crossover in oscillators. The Bank Nifty is likely to rally towards 30,650-30,950 levels and we expect SBI, Axis Bank and Canara Bank to see an upside of 8-10 per cent from the current levels.

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