Nifty update for 16 - 20 Jan - 2012

It was a positive close for Nifty after some time. Now we need to see how long would be the recovery process.If we have a close look at the beaten down sectors these sectors have given a much more meaningful or added some kind of an 'extra effect' to the rally.Many of the large cap stocks are close to their resistance points and would likely to face some pressure moving forward. There are some important Fibonacci numbers place around 4950 and any thing above should be treated as a bonus and one should book partial profits in long positions.There is a break out pattern around 5050-60 levels in the medium term and thus investors are advised to stay with their buy positions.As a trader i would be happy to square off my long positions at the current level or any where close to 4950 -5000 level.Though Nifty had a good rally stocks are being reacting as if it is in a bull market. Thus it is time for many of the large cap stocks to retrace back to a low though it would not be a new low.Volatility and turn over data are not showing any kind of reversals and we would be in the third stage of the rally in the coming week ie; we had a rally a profit booking session and the secondary rally to confirm the top.As per time cycle we had a top due on the 9th of January and we are expected to form an interim top around 16,17 th of January. Lets keep 4810 - 4950 as the new weekly range.(Followed by an analysis of world markets)