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    Nifty support seen at 11800-11880 levels

    Synopsis

    The index is at an all-high level and the economy is at its lowest in several quarters.

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    The index is in a positive momentum as it is still in a format of higher highs and higher lows.

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    By Kapil Shah
    Technical Analyst, Emkay Global Financial Services

    Where Are We?
    We have seen extreme polarity between market and economy. The index is at an all-high level and the economy is at its lowest in several quarters. After hitting an alltime high, the very next candle was bearish — technically known as Bearish Engulfing pattern. It was formed on the weekly chart which carries more weight in terms of its implication. RSI reading comes at about the 50 level. It is coming down from an overbought zone. RSI had formed negative divergence which shows lack of momentum on the higher side.

    What Is In Store?
    The index is in a positive momentum as it is still in a format of higher highs and higher lows. An immediate pivot level is in the range of 11800-11880 level. Decline up to the mentioned level will be considered as a corrective decline within the overall positive trend. But a move below the 11800 level will be the first sign of weakness. On the down side 11700 and 11600 level will be immediate support level. In the same way Nifty Bank has support of 31000 level.

    What Could Investors Do?
    Along with the index, many of the sectors are at resistance or started to show some weakness. It indicates caution. At this point focus can be put on the service sector like financial or IT rather than the manufacturing sector. From an investment perspective, the ideal level seems to be around 11600 level. Besides, the reality sector is also showing a positive structure. Within that Oberoi Reality can be considered.

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