Nifty broke below 5700 and is expected to trade till 5600-5620 in the short term with a reversal above 5740 levels.As mentioned in the previous post 5700-5710 was a crucial support zone as far as nifty futures was concerned and it was decisively broken on the Diwali day. The rate sensitives like banks and infra would be under pressure and i dont see any logic in holding these stocks when the market is heading down. S&P would be moving towards the 61.8% retracement zone of 1350 levels and it could offer a possibility of bounce back close to that level. Though the break down in nifty would be slow because of the good amount of optimism but i am expecting a stock like SBI to face pressure in the near term and is expected to trade till 2050 in the November series. If we look at the options data we could see that because of the number of holidays and nifty held 5750 levels for quite a few days there was enough time for options writers to sell 5800 call options. Thus it would be difficult for nifty to regain 5800 zone in the current series.One sector that is offering some hope on the long side would be tea companies like Jayshree tea , and Goodricke group where we could see huge delivery as compared to the total trading volume and traders seem to be accumulating these stocks on every dip. Volatility data is showing that long positions got squared off below the psychological support zone of 5700 and i would not be a buyer till nifty makes a pause and it is wise not to catch a falling knife.
