Nifty finally broke out of 5330 levels but with lot of 'injuries'. Though it closed at the days high i could not see any major stock supporting that strong closing. Thus nifty can just give movements on the upside at a slow pace and as i said in the previous posts there are heavy writing happening in 5400 call. If we observe it carefully we could see that nifty futures crossing many hurdles but as the volatility is not on the rise it would not affect the 5400 call premium. At the preset scenario we could see nifty moving upwards after one or two dips but the pace at which it moves on the upside is really questionable as it is giving options writers plenty of opportunities to utilize the extra premium. India VIX is just 2-3 points away from the least volatile scenario and as the best case nifty would retest the highs of 5600 but i would not see a sudden move on the upside after that.If you are not an options trader it is better to leave nifty and concentrate on stocks. If nifty is again going up volatility index would touch its lower zone may be around 15-16. After a certain point it is impossible for nifty to go up because the options writers will not get enough premiums to write options.The target on the upside would still remain as 5470 levels but the pace it would attain that level or anything above that would be questionable. It can be in a bigger range bound market of 5200-5600 and that can sort out the issue of volatility.Bank nifty is still an under performer and that would be only index that could give some hope on the upside but all the banking stocks are seem to be dead. Trade in limited number of stocks and when ever you are getting stuck just get out of the market and wait for a better opportunity.
Stocks with positive bias (above previous high)
Biocon , Sail (above 100), mcleod russel, lic housing, Coal India
Negative bias (below previous low)
Allahabad bank
Yes bank
DLF
