It has been exactly a month that the Nifty has been moving in the narrow band of 5350 and 5500. A major support likely to come at the 5350 level on the downside and only a convincing breach of this level would lead to a bearish outlook of the market in the near term.

On the upside, the trend channel resistance is at the 5510-5530 level and a breakout from this level may lead the Nifty to test much higher levels in the medium term.

In the current market context, the strong is becoming stronger and the weak is becoming weaker. State Bank of India, Tata Motors, LIC Housing Fin and REC are a few examples of stocks which are gaining strength continuously while Reliance Industries, RNRL and IVRCL Infra continue to remain weak.

In the extreme short term, banking stocks are likely to continue with the momentum and could rise further. Axis Bank, Vijaya Bank and PNB appear the best in the banking space. RIL may continue to struggle, if it breaches Rs 950 while a pullback of up to Rs 1,015 appears more likely in the short term. HDIL, BPCL, Neyveli Lignite and Patni Computers are some of the stocks that appear strong.

In the options segment, protective puts are being bought in the Nifty at strikes 5300 and 5400. On the other hand, maximum open interest in call options is at strike 5600 and the open interest in current expiry for this strike price stands at just over 10 million.