It was a range bound session with a positive bias and we could a lot of positive movement in many large cap stocks like SBI and l&t. The turn over data is still low and it shows the lack of interest on highs. Thus lets keep 4770-4800 as the down side support and till these levels are taken out we should maintain our upward bias. As i was mentioning in the previous posts SBI had lot to offer than many other banking stocks as it had a better consolidation period than any other stocks.Though we don't have to be short in the market at this point of time there is a good opportunity to book profit at the current level and any thing above 4950 would be a bonus for a Nifty trader.At the top i would be looking for opening short positions in 4950-5000 range.Turnover data was very low and volatility was on the rise with a decrease in the cost carry indicates short positions getting accumulated at the highs. Thus we could say that above 4900 there are some short positions and above 4930 short covering would lead to much higher levels above 4950. Thus play these higher highs with near out of the money call options as we are close to the top.
As per time cycle we have a top due, but we are not expected to have wild swings.Till first week of February we will have a range bound market with a 150-200 points swings.Thus it could be read as a bottom formation pattern at least for a shorter time frame.
