Nifty weekly update 14th -18th November 2011

Nifty held the immediate support levels of 5150-5170 but as it broke 5200 levels, as of now we could confirm the top of November 8.As i said two major stocks Reliance and Axis bank were trading at crucial support levels , Reliance bounced back sharply from those levels but Axis bank got hammered below those levels. A small bounce looks quite possible but on the upside 5270-5300 would be the range to watch out for. On the downside below the important Fibonacci number of 5150 the next number would be 5030-54040 levels. Nifty would be met with some selling pressure at 5270-5310 levels as fresh shorts could come in.Any rally should be used for selling and volatility data shows short positions are still there in the system.On Friday we could see Nifty trying to recover from day's low but at higher levels fresh short positions got created. If we have a look into the turnover data we could see both Thursday and Friday had huge volumes and it is evident that people are selling heavily especially banking stocks. On a bounce back banks could get the benefit as they are the most beaten down sector and fresh short positions would get created on the upside.
Option traders could keep 5140-5310 as the range and make use of the extra premium that is available due to highly volatile situation.