Continuing with my previous posts on NIFTY, my view is getting stronger that the Bears have taken over. While NIFTY has managed to hold to the 4980 support over last few days, it has not managed to close above the strong support around 5200 level since 6th August 2011.

It is important to note that this 5200 is a triple bottom pattern with LOWs made around this level on 30 June 2010, 11 Feb 2011 and 20 June 2011. This support seems to have been broken for NIFTY. Another interesting and very critical indicator is that there was a GAP down opening on 5th August when NIFTY broke this support, and that GAP has not yet been filled, despite NIFTY trying to go past this Resistance. The STRONG support of 5200 has now become a very STRONG resistance. Will NIFTY be able to break out above this level, time only will tell.

I am currently putting my money on the down side and am short in this market.

Those who want to make some money trading short in NIFTY Futures, may enter a SHORT trade between 5120 to 5100 for Target of 4734, with STOP LOSS at 5225. That's around 3.8 : 1 of Reward Risk ratio. Please note that NIFTY will find some support around 4980 as it is 50% of the last downside range that we are working on as well a support on downside on a GANN angle from the Nov 5 TOP. (Please see the charts on my one of previous post http://sumitkgupta.com/2011/08/04/nifty-bulls-or-bear/) . So, once it crosses 4980 on the downside, I mean NIFTY trades around 4950/4960, move your STOP LOSS to 4981, OR if you want to give some room and keep riding the wave, you may want to move your STOP LOSS to 5115 (entry price + brokerage).

I haven't yet worked out the time frames or date as to when this target is likely to be achieved, but since it took only 5 trading days to make the last range, I believe, we should have a target date of 19th Aug or 26th Aug. May be, you would need to roll over your position to next month futures.

I have a bearish view and I maintain that "we are likely to see a free fall to 4700, 4200 and may be 3175 in next 6-8 months"

DON'T PANIC, BE WISE, BE CAUTIOUS.