Back in imbalance after the 2 way auction yesterday the markets hit all time highs again. It looks like 2014 would be the “buy the rumor, sell the event” kind of year as we head into budget day
Background / Previous Auctions :
The Friday May 16th range of 7639- 7182 looks like a completed bell curve.
The Updated bell of the July F is shown here : http://prntscr.com/3wrmyl
Observations in Wednesday’s session :
1) a trend like structure with a gap open which ran into previous swing highs at 7748.
2) vwap of the trend day was at 7733.
3) Visible 2 sided auction was visible between 7740 and 7760.
4) Gap between 7702 and 7678 would be new support for the index
5) 7720 saw huge buying during the day and will be an important area for the rest of the week.
OutLook for Thursday :
The market opened above value high and range and most of the gains were eaten up in the gap open.
7738/ 7740 will be the first support for the day followed by 7720/23.
The trend up is intact and shorts taken would be aggressive in nature only.
If we hold above 7740 in the morning IB then new longs should be initiated with sl below 7738 for a run to 7800 and 7837 by friday’s session.
Weakness will come only if 7720 breaks tomorrow.
BankNifty :
Background/ Previous Auctions :
Friday May16th huge range of 15888- 14418 June F provides a background to the entire moves we may see in the BNF for some time.
The updated auction of the JulyF is here : http://prntscr.com/3wrs9g
Within this range a balance is being seen at 15406- 14936
Observations in Wednesday’s session :
1) break from a neutral centre day gave a P shaped profile .
2) The move made it to 15590 target but fell short of 15699
3) vwap of 15588 was well defended
OutLook for Thursday :
15580 will be first support for BNF tom. If 15580 breaks then BNf can fall to 15530 and 15510 where there are buyers.
Above 15645 there is a 55 point trade to 15699 and all time highs of 15888 above that.
Below 15470 the move will be considered a failure and the BNF can drop down to 15251 quickly.