Nifty finally broke out from our support zone of 5180 and is on to a journey towards 5050 or lower. Most of the bigger stocks are still breaking down and they are not showing any signs of short covering. Anyway we are close to the 50% level of the entire rally from 4530 - 5630, so i would like to square off my short positions and wait for a bounce back. Though the bounce back could extend to 5150-5180 levels it is expected to come down to 4950 in the short term. As per time cycle we had our date on 5th of May which is very crucial for a trend deciding move. The trend for the short term is clearly on the down side and any bounce back would be met with some selling pressure on the upside. Bank nifty has broken down from an important support zone and thus it cannot support nifty on the shorter term. Stocks like SBI and Axis bank are close to their support zones of 1950 and 980 respectively but ICICI bank seems to have a lot more downside than the other banking stocks. I did mention about the low volatility index before the previous expiry and volatility index was expected to rise.The volatility index came up from the lower levels of 17-18 to 21+ levels indicating lot of short positions in the market. Thus if you are short in the market wait for a decent bounce to trade on the short side.
