Nifty followed what bank nifty was telling and that was major thing mentioned in my previous post. I did expect a bounce but only with the help of bank nifty and it broke below the crucial 11600 levels and went for a correction.The index has been sliding in a perfect 5 wave pattern according to the Elliot wave theory and it would be completing the 5th wave soon. India VIX is near to to its 2 year's high and all is well to expect a perfect bounce to 5700-5750 zone. In the June series 5700 can be the ceiling but if there is a bounce it could extend to beyond 5700 levels(in July series) too. I was mentioning about the distribution pattern in S&P below 1600 levels and it has given a correction of close to 50 points below that. Nifty has been giving lower top lower bottom formation in the daily charts and is expected to trade till 5200 in the coming months.On the downside we could see good addition of 5500 puts ahead of expiry and i dont see nifty breaking 5500-5700 range in the current expiry. I would like to go long on stocks like ICICI bank (stop at 1022) , Indus ind bank (stop at 440). It is better not to buy options as we could see lot of extra premium as the volatility has shot up. Nifty is trading at a discount and it would be a favorable condition for covered call writers to buy nifty futures with writing at the money call at the same time(for expert options traders).TCS would be another interesting stock at this juncture and it is getting resisted close to 1435-30 zone in the recent time. It would be a major break out for the stock on the upside above this zone. In the longer term charts we could see nifty breaking 5500 and coming down all the way to 5200 levels and S&P to 1470 levels. In a bull market all the indices would give a leading indication of moving up and many stocks hit new highs and the indian equity market is doing just the opposite.Thus the longer term picture is dull for equity investors and buy a pull back with a view of trading purpose.
