After failing to overtake the crucial resistance at 5,170 for the third time since September, Nifty is currently looking at 5,000-4,950 as the key support range.

If it fails to stay above this range, the benchmark index may be looking to re-test its recent lows near 4,700 level. On Wednesday, Nifty closed at 5,037 or 81 points lower.The September quarter result season so far has been a disappointment with earnings from index biggies such as Reliance and TCS being below market expectations.

According to TS Harihar of ICICI Securities, the Nifty could move towards its August and October lows of 4,730 before making a new low for 2011. ?The Nifty is expected to eventually fall below 4,730 and make a new low,? he said.

The recent market bounce-back has been a result of ‘short-covering’ by global funds, felt a section of experts. ?However, the market’s move in the last two trading session proves that this kind of gains are not sustainable in a bearish market that is making ‘lower tops’ ,? he said.

‘Lower tops’ refers to pullback in market which is lower than the ‘previous high’ reached by the market. It generally indicates a stronger downward pressure on the market.

However, given the sharp decline in the market volatility in the past one week, it may not happen as soon as end of the October series,? added Harihar.

The India VIX?a gauge of the market volatility?has declined 14% in last one week. The VIX on Wednesday closed at 25.9, which was lower than the average VIX of 30.45 in the month of September.

Siddarth Bhamre, head of equity derivatives at Angel Broking, has a different point of view. He says market correction in last two trading session is a result of unwinding of positions and not creation of fresh shorts.

?We have observed a significant rise in the Nifty 5,200 calls for the October series which are believed to be bought by FIIs.

Hence, we are not suggesting creating a fresh short position as yet as the Nifty could take support near 5,000 and move past 5,200 levels in October series,? he added.

On Wednesday, Nifty October 5,200 calls as well 4,800 puts both saw a decline in the open interest but continued to maintain the highest open interest on the respective sides of options.

Interestingly, amid a falling market, the 4,600 puts gained a marginal 1.4 lakh shares while in-the-money 5,000 calls which closed with a premium of R91 saw an addition of about 6 lakh shares. Both these developments substantiate a dampened sentiment amongst the traders, said a derivative trader.