Nifty update for 4th Jan 2012

Nifty extended its short covering rally to 4750+ levels and it was a rally with volume.It was spending one week with out volumes with a negative bias and when it started moving up we had a massive rally with good turnover.We had our upside range around 4730 and it gave around 50-60 points on the breakout. For a trader Nifty had a decent consolidation on the down side and it should be a buy on dips market with an upside cap placed at 4840 levels.This upside cap of 4840 would be the level to book your long positions but don't go short in a rising market.The interesting stock for a buyer would be ICICI bank above 735 levels and the stock could be a decent bet for 770-780 levels .As a nifty trader 4700 would act as a cushion on the downside.As mentioned in yesterday's post Nifty had some serious short short covering and SBI gave as an upside profit of 50-60 points.Turn over data is showing a come back of institutional traders and they were net buyers at the end of the day.Volatility data is showing massive short covering and buying at lower levels indicating a range bound market with a positive bias.As a buyer i would be concentrating more on some metal and banking stocks rather than weaker names like Reliance as it has not spend enough time at the bottom.Thus the new range would be 4690-4850.