Our last week’s view: “The Larger time frame has gone weak and we maintain 7830 as the immediate target below 7950 and a possibility of 7645 and 7545 before the Month of November runs out”. The index is still one time framing lower which in Market Profile means complete domination by one party viz. sellers in this case. The index has now closed below 7930 and the stated support of 7830. Friday was the first session since 8220- 8260 broke that we had an establishment of a balance. It would mean a pause in the downward momentum for now but the possibility of sellers coming back at higher levels remains
Last week’s report can be assessed here: http://vtrender.com/nifty-bn-weekly-view-spot-for-09-nov-13-nov15/
Nifty TPO charts:
On Monday, we gapped down on the news and hit a volume of 20 L in the first 5 minutes on the Nifty enough to set up a trend day and a close at the highs and resistance zone of 7940. On tuesday, we, however, opened lower and failed to hold the vpoc of the previous sessions which was a good enough indicator to establish short positions and the NF closed at the Opposite end of Monday’s trade in another trend day. The Mahurat session gains were wiped out in the first few minutes of Friday’s session and the day type was a neutral center with an FA at 7730 spot.
Up above we have annotated 2 charts showing a weekly composite auction and a monthly composite. The auctions work in their own time frame and not the exchange regulated time of 3.30 pm, hence viewing an auction as a process on market time makes more sense.
The weekly is still one time frame lower in movement, but Friday’s neutral center was the first we had as a Gaussian model from the time the 8220- 8260 support broke in expiry week of October. Against this profile market participants would look for a bounce as long as 7684 spot holds in the coming week. The Nifty made a low of 7730 and closed at 7762 in the week. Price wise a confirmation of the bounce is a move above 7840 spot. If 7840 spot is crossed the market would look to extend the gains by another 80- 100 points to 7920 and 7940 spot during the week.
The second chart is the higher time frame and shows us a rejection from the developing POC of 2015 at 8330 levels.The profile on the extreme right is still trending lower and would tell us that levels of 7940 and 8013 and also 8110 if seen in the coming few weeks would invite more selling towards 2014 POC of 7530.
BankNifty TPO charts :
The excess seen on Monday remains on the charts.
Since the close was at weekly POC we await a movement on Monday in the early auction. However any continuation from Fridays higher closing at 16932 spot, may see supply again at 17070. Above 17070 the index can run up to 17180 – 17202.
Support for the week is at 16830 and 16685 if 1683o does not hold.
We have used quantitative analysis and the principles of Auction market Theory to arrive at our levels. For running updates of the daily and weekly moves and to join our community visit – Vtrender Trading Room