Nifty has finally confirmed the top of 6120-30 levels and is moving down to immediate target of 5880-5940 zone. It is logical to assume a bounce back between these levels because of the multiple support zones. Options data is telling as a range of 5700-5800 but it can be reached after a substantial bounce back to 6050-6060 zone.If you see the institutional data we could see that they have started selling index futures and buying stock futures. The large cap space still held its head up by not reacting to the negative sentiment in nifty. Thus for traders it would be a little bit confusing whether to take a short position or not. Options traders have to be careful while reading the volatility index too as they might end in buying expensive options contracts. If you see the pattern in nifty the hourly chart we could see a symmetrical triangle pattern with the lower end lying close to 5970 levels and a flag pattern with the lower end lying close to 5870 levels.The width of these patterns are larger compared to the normal ones and it could help nifty to bounce back from these levels.I would not be surprised to see dollar close to 59+ levels in its final leg of up move. These bounce backs can be justified just because of lack of time for a distribution pattern but if we see the options data we could see the maximum build up was at 6100 CE along with the build in 6200 and 6300 strikes on the expiry day. It is telling us that going ahead 6100 would be a stiff resistance and it would be a sell on rise market with a downside target close to 5940-5870 levels.Traders need to wait for a major break down as it needs decent distribution pattern which has not happened yet.
