The RBI meet turned into a non-event but the market was anything but non-eventful. Classic auction theory at work again in a neutral extreme setup.
Nifty Aug F :
Background / Previous Auctions :
Medium Term :
The Friday May 16th range of 7560- 7125 (spot prices) forms the backdrop of the move we may see in the Nifty.The auction remains positive as long as we close above the highs of that day (May16) The largest drop seen that day was 432 points.Targets for the Upmove remain 7900 spot and 8300 in the medium term. Support at 7100 spot.
Short term :
Support for the buyer is at 7652 F . Second line of support is at 7530 F
7652 support was tested and the market went back into imbalance . Imbalance targets are at 7804 and a possible 7884 F
Observations in Today’s session :
https://www.dropbox.com/s/v07iuc61bcadt58/OF_10min.png
1) Neutral extreme day with close near the highs
2) Profile had both buyers and sellers but buyers finished stronger on the day ( only in finish terms)
3) Vwap at 7720 and lack of big buying as suggested in chart above meant a market which got a little bit ahead of itself
Hypothesis for Tomorrow
1) Hypo1 ) The anomaly at 7740- 7746 should get a visit for repairs. If order flow shows longs coming back at 7746-40 then new long additions can be tried here for 7784 again and 7804 with stops below 7720.
2) Hypo2 ) The market starts to weaken below 7740 and will fall to 7720 and 7706. the level of 7694 is the last support now for the trend to remain up this week.
BankNifty F :
Background/ Previous Auctions :
(No change from previous report)
Medium Term :
Friday May16th huge range of 15733- 14430 Spot Prices provides a background to the entire moves we may see in the BNF for some time.
Short Term :
15388 is vwap of last week in F and a must cross for bulls.
Observations in Today’s session :
https://www.dropbox.com/s/nib52br89ukijnv/OF_BNF_10.png
1) BNF is now a triple inside structure
2) vwap for all 3 days has been at 11300
Hypothesis for Tomorrow
1) Hypo1 ) We look for a break of today’s range between 15420 and 15160 to initiate new positions. Longs above current day high will get us 15505 and 15630 mentioned yesterday
Shorts will get us to 14960 below current day low.