It was a day for a much needed relief rally close to 4950 levels. As i was mentioning in the previous posts traders are getting enough time to close their short positions and any rally in nifty is happening due to buying happening at lower levels. On the way up nifty has to cross so many hurdles which are placed around 4980 and 5030 and it does not appear to be that easy. We could see some serious short covering happening in stocks especially in L&T and some major large cap stocks. Though there was a bounce back, banking stocks were not in support of that rally and that should be considered as a negative factor for nifty.If there is an extension of this short term bounce stocks like federal bank and Voltas are expected to move higher. On the short side if nifty makes an upside cap the negativity would be visible in stocks like Axis bank and IDFC. As a trader apart from nifty and the mentioned stocks i would not like to go for any other and it can be a choppy market.Anyway as per the charts and derivatives data 4800 would act as a decent support on the downside and any fall close to 4800 should be taken as an opportunity to cover any short positions.Volatility data shows some short covering happening close to 4880 levels and never try to go short when nifty is trading at a discount of 5-10 points.
