The short Covering we had seen in the week prior, last thursday gave an opportunity to the Buyers to build long positions in the index and the Nifty finished near the highs of the week after running up 300 points from the lows. The coming week has series settlement and the focus comes back on option positions but the charts foretell a 8335- 8130 kind of range for the coming week with lows being strong at 8130 levels to bring more buyers and the chance of 8355 breaking upwards to give 8450 during the week.
Last week’s post can be reviewed here – http://vtrender.com/nifty-bn-weekly-view-spot-for-15-19-june15/
Let’s look at the weekly charts and see how it could play out. We are not trying to front run the markets here but trying to gauge the strength of the auction to move from point A to point B . The Points are chosen through a careful study of the Market Profile and the auction strength and bias determined through it’s principles. The core idea being that the markets always move from zones of acceptance to zones of non- acceptance even rejection.
Outlook :
( expiry looks settled between 8334 to 8130 with a possibility of a run to 8450 depending on the reaction near 8335)
In the last 2 weeks we have pointed out the high volume zone at 8130 levels on the charts. This HVN is still visible in the chart above dated 1st June ( 3rd from right).
We believe dips to this zone will be used by the market to add long exposure during the week and it would be a nice place to initiate longs at this place with stops below 8075 spot. The objective of the auction should be the VPOC of 02/06 at 8340 spot levels. However should this VPOC be taken out then the auction can run upto 8450 levels before Friday.
The overall daily auction still shows a march in value higher and the bears will have to take out 8130- 8080 support band early in the week for the auction to change polarity .
Till that happens buy all dips this week.
BankNifty :
Outlook :
(Support has moved up to 17500 levels- Upsides may be capped bear 18260 during the week.)
The 2 weekly POC’s near 17480 – 17560 are likely to protect downsides during the coming week.
Auction template is still the Profile of 01/06 ( 3rd from right) just like the Nifty.
The broad range likely to play out is 17700- 18260 where 18260 is the VPOC of June 2nd .