My analysis as per the chart.
Bar analysis.
Friday nifty opens at thursdays close.
Fridays high was not crossed the thursdays high.
Friday close is 100% lower than thursdays close.
Friday close is 70% lower than low of the week.
Conclusion: Price behaviour shows, Market is in highly bearish mood.
Moving average analysis.
price is below 20 and 50 days moving average.
Both 20 and 50 are moving downwards.
Price is not so much faraway from 20 days moving average and there is no struggle to pull back
and free fall observed at this level.
Price is just 50 points nearer to 200 days moving average after crossed upwards on 06-10-2010
and no hesitation to fall even near to 200 days moving average.
Conclusion: we have to see how the market reaction at 200 days moving averag on monday or tuesday.
Trend line analysis.
Market lost its uptrend long back and given clue in Nov & dec months
it moves in sideways or downtrend only.
price broken through the channel strong upperline 5700 levels with strong price movement
and broken the next small support levels of 5670.
Conclusion: Monday (17-1-2011) we have to see whether it may try or not to break the upper channel line i.e at 5700 levels
or continue to free fall.If falls continue and if it is not honour the 200 MA it may go down to
5500 levels.
Final coclusion :
Take Long positon above 5850 levels only if price penetrates through 5700-5800 levels.
otherwise we have to wait till market gives the clue to enter at 200 MA levels or 5500 levels.
Too much risk in trading BankNifty or its options. Views welcome.