Nifty weekly update 23-27 January - 2012

We had a decent pull back rally extended upto 5050 levels.Nifty futures closed at our upper range of 5060 and it hit those levels before 23rd of Jan as mentioned in 18th Jan post.We are at a crucial level of 5050. The level marks a major Fibonacci number as well as a trend line resistance. A break out to 5100 zone may turn the whole setup to a bullish one instead of a bear market rally.If you join all the short term trend lines o a daily basis we could see it is a fresh break out above 5050-5060 levels.Volatility data shows that short positions are getting accumulated on highs and it gives a possibility of a retracement towards lower levels. Thus as i was mentioning in the previous week's posts buy the dips and square off your positions at the upper end of the channel.A retracement towards 4800-4900 levels would still be good for a bullish setup as we have a higher top and higher bottom formation.We have a trend line and fiboancci resistance at 5060 levels and a price resistance around 5130 levels. Thus remember these highs for squaring off the positions and new break out levels on the upside.As per time cycle we have a range bound market with a 200 points swing but a major move is expected only close after the first week of February ie; 8-10th of Feb 2012.(Followed by Nifty weekly chart analysis from 2001-2012)