Nifty update for 07th December 2011

It was a range bound session and Nifty is in a double top kind of formation near the Fibonacci level of 5100-5110. As long as Nifty does not move above these Fibonacci levels the double top formation is confirmed. We were in the second phase of the rally , ie; profit booking session but Nifty was bouncing back from the lows with lot of stock specific action especially Axis bank and SBI.Any profit booking session would be continued by a secondary rally to confirm the top. So if one has to go short he should get the top and otherwise it would be buy on dips market as i was saying through my previous posts(in the coming sessions too).Dollar Index was not ready to cross 80 + levels and that really helped nifty to get good buying interest. At these levels of 5050-5100 one should have a look at the premium with which Nifty is trading. As of now nifty is close to the maximum premium levels of 30+ where it is extremely biased towards the upside. Thus any decrease in the premium with an increase in volatility is a sign of short build up.Some short positions were created in nifty as volatility was on a rise.Poor turnover data shows that it was a profit booking session and all the up moves were with out much volume.The immediate support lies at 4930 levels and if nifty crosses 5020 levels on the downside with the same upside cap today's high is confirmed . Thus as of now 4930-5150 would be the range.