Nifty gave a much needed short covering rally before heading lower to 5560 zone. Bank nifty has broken down on monday and it is heading towards the immediate support zone of 10900-11000. There is no point in initiating long positions in a short covering rally and if the market has to rally it will spend days in the lower end of the channel and banks should give some meaningful recovery for nifty to move up. Volatility and turnover data is showing marginal short covering happening in stocks but FII's are still playing with their arbitrage positions in nifty options.There is no harm in booking short positions in PSU banks as they have started correcting much before nifty broke down and the rewards were decent enough. On the long side Wipro also gave a smart recovery and the stock is moving up with lot of buying interest at lower levels. Thus wait for an accumulation pattern in all the major large cap names before initiating any long positions. The range can be 5600 - 5660
