We now have a slight change in the view. We have been warning you from 5100+ levels that there is not much upside left; however, the downside could target 4600-4700 right from October 09 and everytime Nifty tried to sustain above 5100+ it was met with a fresh round of selling creating newer lows and newer highs each time. The struggle between 4700-5300 is undoubted too wild. Our regular clients must have been benefitted from our cautious approach at higher levels.



We have slided 11.65% from the top in 30 calendar days . However, the rise from 4576.60 to 5110.50 was in 29 calendar days only. and the recent rise of 4538.50 to 5182.55 was in 38 calendar days. even the previous swing of 4943.95 was broken in higher time than the rise from 4943.95 to 5310.85 (16 days) and to break 4943.95 from 5310.85 it took 20 calendar days



We are now near 161.8% level of the previous swing 4943.95 -5310.85 which comes to 4717.21 and 200% comes to 4577 which is also higher than 4538.50 !



So, for a faster break we need 4538.50 to be broken in coming week by Friday.



Considering the importance of 4650 level which is 200-sma and 200-ema both; we doubt that this level will be broken at one go. We would prefer two closes to turn more bearish.

Secondly, the difference between 50 day SMA and 200 day SMA is now at 8.50% which was nearly at 23% when we approached our cautious stance on NIfty



We are now 7% away from 50-day SMA and its ripe for bounce



4830-4850 is our 1st gap closure target with 2nd target as 4929-4950 (38.2% retracement)



We shall turn bullish only on 2 closes abv 5092 as we again have a clusster of 62% near 5020-5092 zone ... (Swings of 62% retracement levels - 5 Swings) So now only abv the highest cluster we turn bullish and that too on 2 closes.



We also have triple divergence on Nifty Futures chart. and 4850 is capped by a negative supply line from 5300 levels... We also have a gap at 4930-4950 which should get filled. Abv 4850, we expect a round of short covering



Our Volatility Indicator is also calling for a bounce



Nutshell: We exect a bounce to 4870-4950 range... which could extend upto 5050-5100 range and then a fall....

Act on it by selling puts of 4700 now and selling calls from 4900+ levels as and when nifty moves higher...



Current scenario favors going long with 2 closes below 4650 as the stop loss.