Nifty update for 19th October 2011

As we saw Nifty had a sharp fall but held our range of 5000 on the downside.It was a huge gap down opening and nifty would face pressure on the upside till 5120 ..and as of now it would act as a cap on the upside range.During the final trading hours lots of shorts got covered and some large caps saw buying interest. If it is a huge rally like this from 4700- 5160 it is common that those who could not participate in the previous rally would join the market on any dip as a buyer. On the downside key levels to watch are 4950-70 range as that is the range from we saw buying interest in the market and we need to see if people are ready to add more positions on the long side at 4970 or leave the market at these levels.Trading volume were much lower and we need to wait for calling it as a market to go for single side trading positions.It seems to be a direction less market because of lack of buy or sell triggers and option writers still have the edge till a range break out happens.Option traders could maintain a broader range of 5000-5125 ...Only factor that confirms a trend on the downside is rising of dollar against rupee and the volumes in nifty tell you the story that shorts got covered around 5020 levels and short positions can get created at two points , below 5000 and at 5120 levels.Even if we can see some kind of short covering one cannot expect that range of 5120 to be taken out that easily and go for a trade on the long side . In a nut shell lets wait the range break out now at 5000 - 5120 levels.