The short term trend in all the world indices is up but the analysts know that there is a formidable ceiling on the upside. Rather there is a limit not too far ahead that is unlikely to be surpassed.

SENSEX is likely to face strong resistance in the band between 10700 to 11000. Positional traders could start initiating PUT options in JAN/FEB series of NIFTY strike 3000 or above when NIFTY spot is between 3150 and 3250. The premium of call options in Jan series is very high, and to trade on long side it is much wiser to trade in cash segment for a couple of weeks. Buy on decline with stop at 9475(Nifty 2875) for a target of 10300(Nifty 3170) or 10600(Nifty 3250).

There is lot of enthusiasm about the forthcoming earnings season in January, where not much erosion is expected in profits if the advance tax numbers are any indicator. But this enthusiasm may die down as and when any one big corporate comes out with discouraging numbers. Whatsoever, the world economic scenario is bleak for the next couple of quarters at least and the emerging markets like ours also can not remain unaffected by that.

Falling inflation and an expectation of another stimulus and further fuel price cut by the Indian government could keep us buoyant for some time more.
Even if the SENSEX manages to surpass its Nov 5 peak at 10954(Nifty 3241), it is very unlikely to move beyond its 100DMA placed around 12000(Nifty 3600). But it is more likely to respect the 11000 resistance and reverse back in the days to come.