#39;Probability of Nifty hitting 11,770 is higher now; auto, commercial banks look good#39;
Nifty detested to close below 11,550 in spite of having multiple hammering last week. Almost every day, the market broke the level of 11,600 and tried to dismiss the level of 11,550, however, it found strong rejection from bulls.
Stocks like Tata Motors, Maruti Suzuki, ITC, Hindustan Unilever and Cipla were top performers. On the other side, the most dependable stocks like HDFC Bank, HDFC, Reliance Industries and Infosys failed to provide support.
Strong rejection at the lowest level of the Doji formation helps the market to move higher. The probability of Nifty hitting 11,770 has turned bright. Again on the higher side, 11,750-11,760 would attract level-based selling in the market. However, break and close above the same would lift the sentiment grossly on the positive side. Above 11,760, Nifty would rally to 12,000 with a minor resistance at 11,900.
In case Nifty breaks the support level of 11,550 and closes below the same, it would drag the sentiment. It could fall gradually to 11,400-11,350. If Nifty does not fall below 11,550 then one more attempt to cross the level of 11,770 is more likely.
Sectors to watch for:
Auto, FMCG and pharma stocks did extremely well. Technically, we feel, auto sector is likely to continue the current up move without any major correction. It would help traders as we are expecting broad-based rally from the auto sector.
For FMCG sector, initially, we would expect stock-specific activity, however, towards the end of the week broad-based rally is more likely. Pharma sector should witness stock-specific buying at supports. Commercial banks will do well in the current week as technically, they have corrected to their important support areas in the previous week.
The author is Senior VP (Technical Research) at Kotak Securities
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