Stock picks of the day: Nifty may head towards 11,900-12,000; buy on dips

After a stellar rally of more than 9 percent in just two trading sessions, the domestic markets took a breather during the past few sessions. Nifty spot has been oscillating in the range of 11,700–11,400. On the upside, the index is facing headwinds near the 11,700 mark since we have a cluster of resistances there.

 

The first one is the downward sloping trend line formed by joining the peaks of 12,103 and 11,982. Next is the lower trend line of the Andrew’s Pitchfork tool formed by joining the points like 9,951, 11,760 and 10,004 whereas 11,694 is the 78.6 percent retracement level of fall from 11,982 to 10,637.

 

Going ahead, for the markets to extend the recent euphoria, the Nifty will have to clear the 11,700-mark. In such a scenario, we might witness levels like 11,900–12,000. On the contrary, in case there is a dip from here, 11,400 is likely to act as a strong support for the index. A move below the same might aggravate the selling pressure, which could force the index to meet its 200-day simple moving average placed at 11,244.