Nifty Technicals Nov 28th - Dec 2nd

This previous week we saw some rather rapid downfall and the rate at which it descended was quite phenomenal. For the coming week we want you all to remember that we are amidst the corrective wave, so we do have another wave or down leg pending. Our target of 4500 has not yet attained its goal and this is one of the  better opportunities for investors to take short positions at higher levels. We could see some bullnishness during the first half of the week - my guess would be till wednesday - we could see nifty hitting the 38.2% retracement levels @ 4898 and if it manages to cross that maximum we could see is 4976. Athough I have my own reasons to remain fairly skeptical about a move uptill 4976 but technically the markets are oversold and MACD shall soon be generating a buy signal.
The move up shall happen in 3 waves. (2 up 1 down). Now that we have already crossed monday and we jumped 141 points. This makes me fairly bearish for tomorrow as we may see our second wave down and a third wave up to 4898.

                 

FII DERIVATIVES STATISTICS FOR 28-Nov-2011
	BUY		SELL		OPEN INTEREST AT THE END OF THE DAY
	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores	No. of contracts	Amt in Crores
INDEX FUTURES	91834	2184.22	68951	1653.14	510775	12269.70
INDEX OPTIONS	417437	9920.04	382338	9009.38	1725527	41858.30	35099	910.67
STOCK FUTURES	74416	1670.60	50038	1140.99	1132425	25436.79	24378	529.60
STOCK OPTIONS	10882	241.60	10064	230.17	19059	448.66

      
The FII have bought 910 cr worth of index options and 529 cr worth of stock futures in OI. These numbers actually make me lean towards a target of 4900 more than 5000. The Net FII position is -302. 59. This also tends to ascertain the fact that we could rather open gap up , go down, recover and consolidate for the rest of the day.

The latter half of the week seems to look rather bearish as we again start our down move to complete this wave structure. This move down would make a lower low.

Perhaps 4500 should be hit sooner or later, but I would still not rule out the possibility of 4000 as of yet.