We had a consolidation period after our previously mentioned time cycle date of 5th of February and we are yet to break out of the important resistance zone of 5440. As we were seeing the break out on the upside is happening with only 10-15 points and we are seeing sharp sell off from those levels.If we see the upper channel between 5400-5400 instead of short selling we could see lot of options writing happening in 5500 calls.The clarity came when every time Nifty was going down the volatility index was not going down and this means every dip was bought and when ever market came back from our support zone of 5330 it came back with lot of buying interest and not because of short covering.Thus it is a confirmation that lot of buyers are there in the zone of 5350-5400.If we are breaking 5330 on the downside we could see these long positions getting squared off and i would not be surprised if nifty gets into 5150 -5200 zone before the next upmove.Consider these as normal bull market corrections and once we get a rally of 800-900 points a minor correction of 200-300 cannot be ruled out and these would be really good for a good bull market.When Nifty is giving a break out on the upside every day with 10-15 points move every day but fails to cross above these levels it is a clear evidence of option writing and not short positions in the futures.On friday Nifty could not cross our mentioned resistance levels of 5440 and thus there is a valid reason to consider that zone as a huge resistance zone. Thus 5400-5500 zone is still to be considered as a no man's land and if anybody has to buy he/she must be doing only from an intra day perspective and that too near out of the money calls.If Nifty takes one more dip to our support zone i would not be a buyer and wait for some lower levels for a new entry on the long side.As i said in the previous posts when ever we are getting a break out we are hitting the top channel and it is clearly an exit signal for long positions.Lets keep the range as 5230-5440.
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