Nifty update for 23rd December 2011

As said in the previous post it took a dip and we were buyers on the first dip. From there Nifty took us to 4750 which could be a decent level for a Nifty buyer to square off his/her buying positions.Now we have a stop loss at the bottom ie; today's low of 4640.On the upside we could see 4770 and 4860 as major stopping points. If i need to be a buyer buying options on an intra day basis should do good instead of futures. 4840-4860 could form a hurdle as a Fibonacci level and price resistances converge there.If i get a dip i would not mind to buy if volume data is in favor of buy on dips.Turn over data shows that only shorts are getting covered and value buying is happening only in a few stocks.Volatility was on the rise in the first half of the trade thus indicating short build up but eventually those shorts also got covered . In a nutshell Nifty is running up only by covering the shorts and it would not be enough for nifty to carry the momentum on the upside.It needs more buyers to for a decent rally and short covering rally would lose momentum in the days to come.It is a wait call for short sellers as it has not confirmed a top twice so it is difficult to take a call on the short side as of now.Thus let it make a top , take a dip and will have a secondary rally to confirm the top and short sellers would get activated there.As of now 4800 could be seen as upper cap or squaring off your intra day buying positions and at the same time i would like to buy only on dips than highs.