Nifty continued its downward move but the momentum was less compared to the negative close on Friday. Bank nifty did the damage and once again SBI lead the fall. It would be a testing time for nifty and it would be interesting to watch whether nifty could hold on to 5200 levels. Equity market volume is telling buying is happening on dips but only in some selected stocks. Anyway the selling pressure in nifty was without much volume and it is showing that we are close to an interim bottom. It can be 5200 or 5100 and options data would tell you that. One should closely watch the volatility index and 5200 and 5100 put options of March series. A good amount of 5100 and 5200 put options got written till now and it would be a wait and watch game to see whether traders continue to hold these positions or square off. The strength showing by base metals in the commodities market would be a great help for metal stocks to out perform and we could see that in today’s move. Lot many banking majors like Union bank, Canara bank, Kotak bank and Hdfc bank are under heavy selling pressure and I would not like to take long positions on these counters. Nifty is not showing any reversal pattern with an upside momentum and we should wait patiently for an up tick and go for a trade on the long side. One could see that the first rally on the upside would be sold into and nifty is trying to build a base before the next up move. Let’s keep a range of 5180- 5370.
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