Nifty update for 12 December 2011

It was another red day for Nifty with a huge gap down but managed to hold our immediate support level of 4840. The turn over data shows that it was a low volume day but instead of creating long positions lot of short positions got covered near 4840-50 zone as a big is due today. As of now lets keep 4840 as a crucial level for Nifty to make or break and below that one can see 4700 levels once again.In the recent history Nifty never had a triple bottom. Thus if it retests the low of 4640 it does not seem to hold this time. I expect it to retest 4700 with some bounce backs. Some new short positions got created at the higher end of the channel around 4940 levels. As long as 4840 holds we could expect a bounce till 4950-5000 levels but the overall trend is biased towards downside. As the volatility was on the rise it is a clear sell on rise market. In a down ward trending market it is better to know the upside cap where the shorts could come in and our upside cap is around 5000 levels.Thus let the world market unfold the trend after the event and we can have a further look for a major trend.(followed by weekly update on Sunday)