Nifty continued its downward move and met the immediate target of 5900 in the short term. As i said in the previous post the momentum indicators are deeply oversold and a bounce could be expected in the short term. Any bounce to 5950-6000 levels could attract lot of short build up and in the medium term it is expected to correct till 5700 with a reversal above 6050 levels.In the short term chart we have wait for 5th wave completion anywhere between 5880-5900 and let the bounce be over for any fresh short build up. Volatility index is showing buyers got trapped i a range of 5940-60 and it would be tough to get through this range and short positions are still lying at 5990-6000 levels. We could see a premium of 20-25 points even at the time of falling and it was an evidence that lot of buying has happened at 5950 levels and they are trapped as of now.A decent trade in the options segment would be to buy 5900 put and 6000 call at any bounce with a total cost of Rs.100.As per time cycle Feb 10-11 would be important dates and it could be a date for bounce from the current levels.The technical picture of nifty looks extremely weak and it has broken the long term channel pattern but the only thing that is promising a bounce is the oversold nature of cash flow indicators.
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