It was a heavy fall from 5400 levels and as I said in yesterday’s post it was a clear exit signal from long positions. Volatility index shot up more than 15% indicating panic selling in Nifty. As it has broken down we should wait for lower levels to initiate buying from a long term investment view. The negative news flow and a correction in European markets led the fall. Nifty and bank nifty are close to important support levels. SBI, Axis bank and ICICI bank are at important support levels and a break below the current levels should see some more pain. In the commodities market one could see a pause in the rally of nickel and copper and it creates a real worry for metal stocks(mentioned in yesterday's post). Investors should get ready to pump in some money from lower levels as it should be considered as a time to accumulate stocks for a longer time horizon. Volatility index suggests huge short build up and nifty ended at a discount. Thus one could see selling on any rise and it might take some time for an accumulation pattern. Investors should wait for a good accumulation pattern and till then trade the mentioned stocks on breaking the support zones. A rising dollar is also a concern and it is close to our upside target of 52 zone. Though it could reach 52 zones it still makes a lower bottom compared to 54 levels. The first reversal for the upside rally should come copper and nickel in the commodities market. Wait for a reversal and till then the short term trend remains down. If nifty breaks the support zones it could see levels of 5070-5100 levels.Watch Jindal steel and ICICI bank for any leading indication in nifty for upward or downward momentum.
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