Nifty gave a new high but closed below the high zone and it is expected to trade till 5330 with a reversal of 5470 on the upside. As we are almost done with the upside target of 5470 which is an important fibonacci zone and in the medium term 5470-5500 could be an important resistance zone. We could see the upside momentum is getting weaker with every upmove but the immediate medium term support lies at around some important moving averages close to 5300-5330. In a nutshell nifty could see a range bound session between 5270-5470 in the coming month.I am not expecting a bigger downside risk in the short term as lot of buying can happen at lower levels just because the retail participation is very less at higher levels. There could be a few stocks like Biocon and Indus ind bank that could attract buying at every dip and the downside levels can happen in nifty in a week or two. Volatility index is telling that some short positions are getting accumulated at higher levels close to 5450-5460. Turnover data is showing lesser participation at higher levels. Bigger stocks like L&T and Reliance Infra are on the verge of a break down and advance/decline ratio is deteriorating at higher levels. Though ICICI bank gave a break out at higher level it seems to be a trap in the short term and it is better to book the longs if get wrong on the buy side.Nifty can give a move in a range of 5350-5450 during the current expiry and could head a little more lower in the next season. It is clearly not a level to buy nifty at 5400+ levels in any case as the divergence is clearly visible.
Stocks to watch.
1. Reliance Infra - The stock seems to be one of the weakest even in the big rally. Below 495-500 zone stock is expected to fall till 450 with a reversal above 515which is the recent high.
