Derivatives Strategies: Bullish signals, target at 11,500-11,600

The Nifty has made a strong breakout from a trading range. This could mean a 5 per cent move over the next eight weeks. Since that period will coincide with the elections, this is likely to be heavily influenced by political news flow. 

The index has moved beyond 11,000 and held above it for three sessions. If this breakout is sustained, we’re looking at a target of 11,500-11,600.  

The background signals are bullish. Breadth has improved with a rally in small- and mid-cap stocks. Volumes have been good, with sustained buying from foreign portfolio investors (FPIs). Session volatility is low,