Nifty update for 13th December 2011

It broke our support zone of 4840 and moving towards 4640 zone. We cannot rule out a pull back to 4900 levels at any time. Thus we were playing the downtrend right from 5130 till now.If Nifty is continuously breaking the lows just trade with options for new lows.The structure looks dangerously weak and any bounce would be met with selling. The way stocks are breaking down makes a trader more bearish in the market. Reliance did come below 750 and ICICI bank made a new low.Thus the structure is really broken down and dollar has touched 53 mark!lets wait till 4640 and the way it is breaking it does not seem to hold 4640 this time.Unless and until there is a consolidation phase traders should avoid buying futures.As an investor i would be adding some stocks in my portfolio below 4640.Options could give you handsome money at these levels.India VIX is telling that lot of short positions are getting covered in between and bounce back may be due at 4640-4700+ zone.Turnover data shows that it was not volume selling and the selling was not happened because of short positions but because of long exit by investors.Thus trade the downside cautiously atleast for a short term. 4700 - 4900 would be the new range for options writers.
(One could enlarge the chart for deciding the support and resistance levels)