Nifty seen in 4800-5000 range for next week

Markets next week

We are in a consolidation mode. There is no point in getting excited on the way up or the way down for the market and that’s been the lesson for May. This is the kind of prognosis that we are working with from the start of the year after the massive crash that happened from January through March. Many people thought that the middle part of the year will go on consolidating and spend a lot of time in a range.

One would have to say, the ranges keep changing, but essentially the market is fairly within a tight range. Sometimes, we get into a really narrow range, sometimes into a slightly wider range, but essentially we are not able to make much head on either side. For next week, we are still pretty much working within the Nifty range of 4800 to 5000. There will be a few sectors or stocks, which will have a striking out performance and those will be the trading opportunities. As we go into next week as well to the market at large, the way we have closed this Friday, I suspect that traders would be guessing wither. It’s a break on 4800 on the way down or a break of 5000 on the way up. It’s frankly a toss of a coin with the market or the screen giving up not many signals as we head into Monday’s trade.

Sectoral preferences

Some sectors have been supporting the index like IT. There has been continuous strength despite the ECB norms and mild strengthening in the rupee, which did not matter so much. Therefore, the stocks are still charting upward courses. Infosys has got back to about Rs 2000; you should look there if the market has to be supported beyond 5000. IT certainly has to continue its out performance.

Capital goods is another sector as well as infrastructure. With the L&T numbers which took a little bit of the sting out of the disappointments from BHEL and ABB earlier. As well as little bit of the ECB relaxation could have lifted the mood for some of the construction and real estate companies. So, infrastructure and capital goods as a space may have a little bit more steam in them to take the market up.

Pharmaceutical stocks here and there seems to be showing some signs of life but these are some sectors which need to move out unless you are playing for contrarian bounces or pull back rallies in some of the interest rate sensitives. For that inflation would have to come into place. So, you can single out a few sectors, which might just move a little bit around supporting the market, but broadly it's still in a pretty much range bound situation next week.