Nifty broke the immediate support zone and now it would be a sell on rise market for a target of 5520-5530 on the downside. There is no point in selling the further break downs as the premium has also come to nil and only sellers are dominating the market. In the stocks front there would be lot of stocks which are on the verge of a break down like SBI, Ranbaxy and Bank of Baroda which would come to a complete sell below the previous low zone. Volatility index is showing that lot of short positions were built up in 5630-50 range and that would be an immediate resistance zone or the stop loss for the short positions. Turnover data is showing that institutional traders are still betting on some stocks and thus dont get trapped by going short below the breakdown and instead do it from the top close to 5630-5650. S&P has reached an immediate support zone of 61.8% retracement zone and gave a bounce back from there. Thus i would not expect much downside in nifty futures but stocks are expected to slide more especially the PSU banking space. The lower end of the range could be 5520-5530 levels where we have a well built trend line support holding the higher top higher bottom formation.
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