Nifty futures hit a new low on the day of expiry and was trading at a significant discount till after noon and as i said in the previous post it can most probably form a bottom whenever the index starts trading at a discount. The session was quite volatile and the index is expected to trade till 5800-5840 with a strong support close to 5550 zone. Most of the cash flow indicators were in the oversold territory and many stocks would continue the rebound in the coming week. There were no signs of bottoming out in many stocks but it is good to see that at least some of the stocks are waiting for a rebound. PSU banking space and metal stocks are were we could see lot of short positions and these are the sectors to focus on any rebound. Allahabad bank, JP associates and LIC housing would be the top pics for this rebound and i expect these stocks could give a cumulative return of 30-35% in the coming weeks. Banking index has broken from the Head and shoulders pattern on the downside and the pattern seems to be giving targets close to 10500 levels . Thus one has to be careful while choosing the stocks and concentrate on only 3-4 stocks and once you get the short term bottom never leave those until the bounce is completed.
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