Nifty update for 20th December 2011

Nifty held our lower range of 4530 on the downside and started moving up but could not sustain on the upside. The accumulation of short positions are much above 4700 levels thus Nifty should hold 4530 levels for any upside bounce.The pull back back was due to some short covering at lower levels and it is expected to be a sell on rise on the coming day too.Nifty has to be in a consolidation phase for any up move and many biggies registered new 52 week lows.As per the wave counts we are in an 'ABC' pattern and the wave count can result a fall upto 4300-4350 levels where an important Fibonacci number can be seen on the weekly charts.Banks led the downfall but Reliance held its level through out the day. On every rise there would be sellers and it would be better to trade in options on any pull back rally. If bank nifty could find some relief close to 7600-7500 it would help the pull back rally. As our range is not broken lets keep 4530-4770 as the range.Volatility was still on a rise and it indicates short accumulation on any up move. Thus it is better to play the trend than the counter trend.It would be difficult to create short positions on a downside break out.As a trader i would buy Put options on a decent rise if the market is forming any topping out levels.As per time cycle 21st and 24th would have a major impact on Nifty. 24th being a Saturday lets assume by end of this week Nifty could form an interim bottom.