Nifty update for 07 - Feb -2012

Nifty futures held our upper trading range of 5400 and we could see a positive day even in the starting of 2nd week of February. As i said earlier we have some important time cycles due in the second week of feb. If we take the corrective wave pattern from 6335 to 4531 we could see Nifty corrected about 1804 points.Take the half of it (1804/2) = 902.If we add 902 to 4531 we will get it at around 5433 levels and any 50% upmove from the bottom is ripe for correction.Nifty did this magic within a month's time and it is clearly over balancing with the time factor.Thus Nifty should consolidate or correct after reaching the mentioned levels and thus the price levels would square off with time.We have our support zone lying at 5230 and any break of today's low would confirm the top of 5400 and a move to 5230 is quite possible.Though it would confirm a top investors could wait for a much more deeper cut for any further investment.On the upside above the upper range of 5400 it should be considered as a break out trade at least for 30 points. Play with these range with near out of the money options.Though i'm okay with the over bought levels in the price oscillators ,(as it is quite natural) the cash flow getting stretched to over bought zone is a real worry.Any downside break out should be considered only as a normal correction and it is still in the first leg of a bull market.Thus lets keep a range of 5230 - 5400.