Nifty update for 19 - Jan -2012

We had a range bound profit booking session in Nifty with average volume.Volatility data shows t only a few short positions are getting accumulated on highs and 4880-4900 would act as good support levels for Nifty.If you read the chart Nifty, it is incorporating everything that is needed for a strong bullish setup with some profit booking sessions.It would really give time for accumulation or distribution of stocks and a much needed process for bottoming out at least in the short term. As i said in my previous posts anything above 4950 should be considered as a bonus for a nifty trader and should be booking profits at these levels. It would still be a buy on dips market as long as Nifty futures hold support zones of 4880 and 4820.On the upside Nifty would be defended at any level above 5000.One worry on the upside momentum would be the inverse movement between Reliance and Nifty. Thus as a logical process if we consider the current momentum Nifty's upmove would be a catalyst for a positive movement for Reliance and if the range bound market continues with some profit booking sessions in RIL would actually be a benefit for the bulls as they can move together.Dollar index is finding tough to sustain at upper levels and this would be a positive signal for Nifty.Keep an eye on the downside levels of 4880 and 4820 as a cushion for the long positions.As per time cycle If Nifty has to hit 5040-5050 levels it has to be before 23rd of January 2012.Thus lets keep 4880-5050 as the range.