Nifty update for 08 - December -2011

As said in the previous post (07 Dec) Nifty would be testing a Fibonacci number at 5000-5110 and crossed that level but failed to close above that level. As we could see the cost of carry was extremely biased towards the buying side and that would be the first sign of a topping out pattern.It was trading with a premium of 30+ points and it eventually got reduced with an increase in volatility . Thus it is a clear indication of short build up on highs. Nifty has almost completed 3 phases of a rally .It was a sharp up move , had a profit booking session and a secondary rally to confirm the top. So as it has successfully tested the Fibonacci levels it could head for a smaller correction as long as 5130-5150 holds on the upside.There would be a slight possibility that there would be buyers on a dip.Our weekly range still remains as 5150-4930.The turnover data shows that profit is taken out at highs and it indicates squaring off long positions above 5120. Dollar is again moving towards 52 zone and closed at day's high.On a medium term view one could keep 5020 and 4930 as major support levels and even if Nifty holds these levels it would be a higher bottom higher top formation which would be good opportunity to utilize the dips for buying.Major worry for an up move would be ICICI bank is at a major support level of 770 and if it is not holding those levels it could correct further.