September Series Charts

Here is a Volume by Price chart of the September Futures (expired contract).

 

The Purpose of the chart is only to see and note the volume weighted average price (vwap) of the series as well as the region where the highest volume occurred.

 

Vwap 30 9 September Series Charts

 

The Orange is the vwap of the series and the yellow is the 2 Standard deviation of the vwap line.

 

The white horizontal lines are the Point of Control or POC.

 

The black horizontal bars are the volume at price.

 

The Value area is in purple.

 

The Market did not put in a normal distribution in September, so to me the value area of September is not important.

 

But the POC and the vwap of the above distributions are the most important points.

 

The vwap of September was at 5734 and the POC was the closing price or expiry price at 5882.

 

All prices are of course Sept Futures.

 

The rollovers were at a 65 point premium , one of the highest I have seen in several months .What it does is, it makes it difficult for a long only trader to hold on to a long position especially if price moves against him quickly.

 

A few things which stand out in the chart and something which we talk about in the trading room everyday 

 

1) The Market tested vwap on 3rd / 4th Sept for new sellers, broke lower but could not find any and carried up above vwap all month. Buyers breathe above vwap freely.

 

2) It's never advantageous to buy a 2 SD or a 3SD vwap touch. You are playing a trade with a 5% chance of winning.

 

3) The test of vwap is due sometime again soon based on this chart ( +/- 25 -30 points to account for OCT premium).

 

4) The Market will be under pressure below the high volume zone of 5882 and is likely to witness increased selling if vwap is not defended.

 

5) If the POC and the vwap are carried with volumes to a Nifty Spot chart then vwap is 5709 spot and POC is at 5869.

 

The BankNifty Sept Chart is below with the same logic as above

 

 

Vwap Bn 2 September Series Charts

 

The above data is all market generated information.

 

It's the market's levels and something which the market would respect. 

 

We trade the market with it's levels, not of our own!