Nifty update for 25th Jan 2012

We had a good rally after breaking the resistance level of 5060 and crossed our next level of 5130 where the recent high was placed.As per time cycle the price is not in balance with the time in the current cycle and we need a healthy consolidation before the next move.We crossed 5060 which was an important level on the upside where the whole set up could change into a bullish scenario.Thus one could keep 4970-80 levels as the cushion for all long positions.Though the call is on the long side we need a good consolidation period for further rally as it could add more buyers at lower levels.As said in the previous posts a healthy correction is always good for a bullish market to stay intact.We are close to another important level of 5200-5220 levels but Nifty normally rallies close to 700 points and we are close to that mark.If we see the charts we have some slow movers with us they are from the IT and Pharma space.Even if there is a dip in the market it would be met with buying for a secondary rally and 4970-80 would be some important levels to watch out on the downside.We had a good turnover data as compared to previous days thus it is fair to assume the upmove was a clearly due to buying and not due to short covering. Thus it is still a buy on dips market and buying puts should be initiated only at the break out of 4980-70 levels or at the top close to 5200 levels (if it is making a topping out pattern).If Nifty is moving higher with out any consolidation it would just be a bubble like we had in 2010. Thus 5060-5220 can be the new range.