Nifty weekly update 02 Jan - 06 Jan 2011

We had a range bound session with a negative bias and it was a week entirely for options writers.In the coming week it wont be range bound session and Nifty is expected to see some volume trading days within a week or two.As suggested in my previous weekly post a delta neutral position would have earned decent risk less profit.The major worry for Nifty in the coming week would be the new 52 week low made my Reliance in the previous trading day. Though some of the biggies held their 52 week lows they are on the verge of break down. Nifty could most probably test its 52 week low zone once again and the major levels can be decided from there.Though we have a break down pattern the cash flow in the market is close to bottoming out and there would be some chance for bottom fishing and investors could utilize these selling climax points as buying opportunities.There would be many reports saying Nifty could crash further and it is difficult to recover from this bear market.As an investor on every 100 points cut one should be adding at least blue chips like ICICI bank, Coal India in small quantities.One should be buying the last leg of a crash and make use of the available opportunities in equity segment. For a trader it can be true that Nifty could find a new bottom but as of now 4300-4400 could be seen as major point for reversal. As a weekly range we could keep 4530-4730 as the new range.Fridays turnover and volatility data show that short positions are getting accumulated on every rise.Dollar index breaking above 80 for the second time would be another worry for the bulls.