Nifty spent the week in a tight range and is expected to trade till 5330 with the reversal above 5460 - 5470 levels till first week of September.As per the nifty chart there wont be any range breakouts on either sides as all the dips are being bought and all the resistance levels are being sold into. Thus till the expiry nifty can spend the time within a broader range of 5350-5450. If we have a look into the stock specific data we could see some of the major PSU banking stocks and real estate stocks are clearly under performing for a long period of time and it is clearly telling that the interest rate sensitives are still under pressure. Without these biggies and the mid cap index it is difficult to imagine that nifty is gonna make a new high above 5630 in the calendar year. All the bounce backs in these beaten down stocks would attract severe selling pressure. IT and pharma space are the two sectors that is driving nifty from the front. A severe under performance from the stocks like Jindal steel, TATA steel, Hindalco and YES bank are really disappointing and the correlations are not working for nifty right now. When the correlations don't work usually the market should trap the bulls on the upside. The volatility data is telling some short positions are still lying around 5450 zone and we have to wait for some big news from the U S markets. If the markets are set for a rally on the upside it has to spend some more time in a tight range bound markets as it has made the current rally with out meeting many downside targets.
Stock to watch
Biocon - The stock is in a consolidation mode for the past 4 months and is getting ready for a break out above 250-255 range. The turnover data is showing that trades are occurring at huge volumes and the stock could be expecting some news in the recent time frame. I guess the stock is getting accumulated at 240-245 levels and that could be the stop for my long positions once it breaks above 250-255 zone. If it breaks out the stock can touch upper levels of 275-280 within a period of 3-4 weeks time.
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