Nifty Mp 02/12/11

Nifty : The chart above is a multi day composite profile of market activity over the past few days. These composite profiles tend to give us a good idea of what the market is doing in it’s time rather than a scheduled clock time from 9.15 to 3.30 pm.

From the left we have the second profile showing the break from 5030 to 4944 Dec future values. As can be seen the break was sudden and the profile non-symmetric. Such profiles generally get repaired in the next 1-2 sessions, but in the context of that auction and news flow and an expiry, the market sold off leaving that zone un-attended. Today’s auction was an effort to work that zone.

The profile before today ( second from right) is a 3 day profile where buyers and sellers had equal strength. The POC at 4815 will be a good support for the market going forward.

From the lows of 4650, we have seen sell reactions of 4777 to 4687 (90) on 25/11, 4885 to 4787 ( 98) on 29/11 and 4862 to 4777(85)  yesterday 30/11. None of these reaction have gone beyond 98 points.If this market sells off beyond 98 points, it will serve as a confirmation that sellers are coming back into the market as before.

This market is now looking at strong resistance in the 5030- 5067 zone, the place of the earlier long liquidation. Down below is the unfilled gap to 4885. Whilst large gaps do not fill immediately, it will serve as a destination trade once the market auctions below today’s lows of 4935.

BankNifty :

The profile of BN carries the same impression as the NF above. The prominent POC increases the odds of an open around the same level.An exit of value area should provide a good setup in the BN for day trading tom.