Nifty weekly update 21-25 November 2011

Though Nifty is giving some hints of a bounce back the structure looks really weak.One important fact is nifty tried for a bounce back when all the biggies in the banking sector registered new 52 week lows. This indicates the weakness of the structure and the only cause for a bounce is nifty is deeply oversold and the stocks need to rise for a fresh selling. Thus the logical target on the downside is retesting 52 week low of 4720 and heading lower to 4400-4500 levels as it is a downward channel.The bullish set up could be possible if it is able to cross 5330-50 levels on a longer time frame.As per our time cycle 21-26 is due for a bounce it might lead to a bounce to 5000-5050 and completes the final tops before heading lower.The turnover data shows heavy selling on any rise and two stronger stocks Dr.Reddy's and Kotak bank have also started declining and this will add to the current weakness. Fridays traded ended with some premium and some addition of good open interest indicates some kind of short covering is happening with less volatility.It is a clear sell on rise in the coming days too!!