Nifty update for 22nd December 2011

We had a good short covering rally and 21st December gave a Christmas gift for the bulls by giving around 150+ points.We had some resistance points around 4640 levels but Nifty could cross those levels with good volume. Luckily Reliance held its 52 week low zone and helped nifty for a decent rally. As of now we can't short this market as it might have some more steam left on the upside. Fibonacci levels are placed close to 4770 and 4840 levels.Thus these are some area's to watch out for on the upside.I would be a buyer on the first dip as it gives a cushion with a decent stop loss. Turnover data shows that it was a clear short covering rally and long accumulation did not happen at lower levels.History says when every one is on the bear or bull side's markets would react in just the opposite way. That is exactly what happened today and treat it as a normal bear market rally. Decrease in volatility and increase in cost of carry with a high OI would indicate long accumulation at lower levels and short covering rally.As said in the previous post we had every chance of breaking 4640 if it hits that level because of the time element involved in it.December 21st has again proved its importance by giving a massive rally.Thus for short sellers let the nifty move any way and make its top , then think about going short in the market.Lets keep 4630-4780 as the new range.