In the previous week, there was a big tussle between bulls and bears in the broader range of 11,300-11,130, which continued till Thursday. However, on the last trading day of the week, Nifty managed to break the range and closed above 11,400, which is grossly positive for the market.
By closing above 11,400, it suggests that the market has stabilised and is ready to move further higher to retrace recent losses.
Above 11,400, it would move to minimum 11,500-11,550, which is a major hurdle for the market. A close above 11,570 on May 20 or May 21 would lift indices to 11,700.
Technically, crossing 11,860 would matter a lot for the stock market as it would shift the base for the market to 11,100 from 10,600.
Whenever Nifty has shifted its bottom, it has added approximately 2,000 points to the base level, which is at 11,100. This has been proven times since December 2011. Readers should go through with the following statistics of Nifty.
If we go through with the above data points, then Nifty could climb to a minimum of 12,900 and maximum of 13,700 in the next one to two years with ups and downs but without breaching the previous bottom, which would be at 11,100. But, for that, Nifty should break 11,860 on a monthly closing basis.
In case Nifty fails to break 11,860 and breaks 11,100 downwards, then in the worst case scenario, we could see 10,300 or 10,100 on the lower side.
In brief, we can expect a minimum 11,550 and 11,700 in best case scenario. The strategy should be to reduce weak long positions between 11,550 and 11,700, as we witnessed maximum distribution in the range of 11,550-11,750.
Fresh buying is advisable if Nifty crosses 11,860. Above 11,860, Nifty could even hit 12,100 or 12,300 without any major difficulties.
A close below 11,100 would be negative for the market. The focus should be on largecap companies, which are part of the index.
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