Nifty update for 31-01 2012

Nifty took out the previous swing low of 5170 and thus confirmed the top of 5220. As of now it should be taken only as a corrective pattern in a normal bull market set up.We have two important levels on the downside , they are 5060 and 5130 . It broke 5130 and is expected to correct till 5050-5060 in the shorter term. As it is a profit booking move in the stocks we could expect a secondary rally after this profit booking session.As i said in the previous post the only sector that we should not expect a downward journey would be IT.When nifty dropped 100+ points on the downside IT stocks held its higher levels , Infosys, tcs, Hcl tech gave some decent trades on the upside.Bank Nifty would face a major threat on the upside around 9900-10000 and as expected bank nifty led the downward move.As it was the leading index it should first complete the corrective phase and start its upward journey for any significant upmove in Nifty. Though Nifty has retraced from its highs it should be considered as a profit booking session before a larger consolidation phase.We have 5060 levels on the downside as a crucial level and 5170 would act as a major resistance levels.As a trader i would be booking some profits in my puts close to 5060 levels. The secondary rally should start after a good consolidation period , thus Nifty would be in a better shape for any upmove. Turnover and volatility data show that though there are lot of short positions got accumulated at the top there are some buyers too on every dip. Thus the scenario as of now seems to be a trap for bulls as they have started buying every dip from 5200 levels.The new range for Nifty futures would be 5060-5170.