Nifty update for 15th December 2011

Nifty tried for a bounce back and it could achieve till 4850 levels. A 100 points bounce from the lows of 4730 should be considered as a decent pull back.As said in the previous post it would be a sell on rise market and Nifty behaved in a similar way.Turnover data shows that some short positions got created at 4830-4850 levels and on the way up this would be a major hurdle to break.On the downside below 4730 we could see nifty testing its 52 week low.As the index is in a severe downtrend the pull backs would also be sharp , thus one should be cautious in attempting shorts in the last leg of the crash. Thus as of now lets keep testing 4640 is quite a possibility and Nifty would find it hard to hold that level. Volatility was on the rise even on the pull back rally and it clearly shows that short positions got created at the top. Though some positive divergence is visible in Nifty's volume charts 4730 could be the deciding point for Nifty.Advance/Decline ratio was clearly in favor of declines and most of the biggies closed near the days low.Lets keep 4640-4860 as the new range.