For Nifty, 12065 remains a strong headwind above which the move towards 12146 followed by 12416 could be a quick affair while a decisive weekly close below 11580 would dampen the bullish sentiment.
To be fair, not too many fundamentals have been supporting the liquidity-driven rally across markets. A lot of economies have been in a bad shape and recovery rates are lacklustre.
We expect markets to remain choppy throughout the week. Most of the price based evidence is pointing towards a broad range action within 11250-11750 with 11550 as its breakeven zone.
Since upside looks limited as of now it is ideal for investors to ramp up their exposures into defensives while post the sharp upward movement traders should avoid leverage, and focus on stock-specific longs.
If we dissect the move to detail then the journey from 10840 till now, it has been the most volatile due to high frequency of sector rotations, and leadership rotations within the index constituents.