Nifty is consolidating between 5500-5640 and it is expected to trade till 5750-5800 with a reversal below 5490. As of now it is giving lot many whipsaws and traders might find it difficult t trade these levels and this is happening mainly because of the volatility index and movement in dollar.As these movements are happening due to external factors there is no change in the bullish view in the short term. Dollar/INR has reached 61 and it is fair to believe that it is the final leg of this bull market in dollar and the heavy premium in the futures contracts is telling that.Volatility index gave a negative close and we could see July futures trading at par with the spot nifty and the interpretation can be traders have squared of some their long positions and i could not see any fresh short build up as of now. The world markets are at important support levels , let it be CAC , DAX , FTSE and Hongkong and it is wise to have some buying positions than initiating short positions at this level. The IV's of many options are at its peak but 5800 July would be a decent option at this stage as we can buy the risk only at a cost of Rs.40-50. If we compare the stocks YES bank and HDFC ltd are giving good trading opportunities. YES bank is a long above 460 and it can happen today or tomorrow and the stop is placed at 445 , expect a target of 490. HDFC is a buy on dips stock , stop is at 795 expecting a target of 840-845 in the coming days. As i had already stated we should consider it only as a bounce back to 5750-5800 levels as the world markets seem to have topped out. India VIX at 21+ levels would medium term traders very good trading opportunities for higher targets and i expect nifty has completed a 5 wave pattern on the downside , price and time wise.
