Nifty gave two positive closings this week and both of them were during the time period mentioned ie; 21-26th November.The pullback was relevant and a much needed one before heading lower.The rollover data shows that bottom is not yet formed and we need to wait for some more time.As of now nifty could be maximum extended to 4850-60 where you could see fresh supply zone.Volatility data shows that plenty of short positions got squared off at lower levels and many got trapped at the lower end.Thus Nifty would go back to those lower levels but instead of going short on break downs go short from the top where immediate resistance points are placed.A usual feature of a major bottom would be , the futures contracts would be trading at a huge discount and VIX would be at its peak.Thus it would still be a sell on rise market.As said in yesterday's post the bounce backs could be sharp with 80-100 points move and these are worth playing with options.
Time cycle data shows you that price factor is overbalancing with time, thus the market should spend some more time in the downward channel to make a proper balance with time.One could see one more deeper cut and it would be a good consolidation period so that one could start buying more in the cash segment.As of now 4630-4860 would be the range for option writers.
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