Above is a long term chart for Nifty.
Since its top formation in Nov 2011 near 6300 levels, Nifty fell to sub 4500 levels to recover back to the recent high of 6112. The rally from 4500 odd levels seems to be corrective. This is suggested by the study of price and time cycle.
In the chart above, the overhead hurdle and resistance is clearly visible for Nifty in the band on 5950 - 6160. (marked in grey oval). Three very important trendlines for Nifty converge in this resistance band of 5950 - 6160 which will be the long term trend deciding level for Nifty. Until and unless Nifty manages to clear this resistance band with support and a massive surge in volumes, this entire rally from 4500 seems to be in danger.
The study of time cycle tells us that Nifty may be in the process of forming a lower top from its recent high of 6112 and thereby completing the basic Dow theory requirement. As per the time cycle study Nifty may form this lower top formation by the end of March, 2013 and resume its downtrend thereafter.
A break below the recent lows of 5790 would confirm the downward bias and push Nifty towards the lower end of the broad channel marked in the chart towards 5400 - 5450.
Important levels for Nifty stand at 5970, 6012, 6064 and 6112.
Our long term view remains bearish on the Nifty till the aforesaid levels are taken out convincingly. One may initiate short positions in Nifty with suitable stop losses as per the above mentioned levels.
SHORT NIFTY on every rise near its resistance band levels with positional stop loss levels at 6180 for TGT of 5400.
