The markets gapped lower yesterday, found buyers and closed near the highs of the session. However OrderFlow pointed a skew towards the downside at the close
|
Nifty Sept F |
https://www.dropbox.com/s/osj4l31tjwedl7j/NF_Compo1.png?dl=0
|
Background / Previous Auctions : Medium Term : We have maintained from Friday May 16th that the range of 7560- 7125 (spot prices) seen on that day forms the backdrop of the moves we may see in the Nifty for a considerable amount of time, as it was a 5 sigma event. The auction remains positive as long as we close above the highs of that day (May16) ( Friday 8th Aug – low was 7540 and close of 7568) The largest drop seen on May 16 th was 432 points and the rally from 5110 has never been penetrated by a drop of more than 430 points . Targets for the Upmove remain 7900 spot (achieved) and 8300/ 8581 in the medium term. Support at 7900/ 7500 spot. Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015 Short term : On the Monthly Time frame we see September Nifty having supports at 7835 and 7706 on spot levels and targets of 8068 spot (done) and 8300 spot. The Market was consolidating in a broad 100 point range between 8075- 8175 F. Last Monday it broke that low and headed down the path of least resistance pointed earlier towards destination trade of 8020 F (achieved) and 7970 F (achieved) . As expected the NF bounced back . We maintain our view of expiry around 8100 levels On the weekly TF the Sept support for the expiry week is at 8057 F .Resistance is at 8162 F now. Observations in Today’s session : https://www.dropbox.com/s/6h6tlot01rnzmqk/sept_nf.png?dl=0 1) Buyers at the Open showed willingness to defend 8070- 8085F 2) vwap of the day was at 8113 3) OrderFlow was not very good and conducive to longs between 8103- 8132 and above 8165 F 4) The NF distribution was slightly skewed towards the downside at the close for next Open. Other Observations from previous profiles :
1) Failed auction noted at 7955 on 27/08 . Since it was not visited in 5 days we now have confirmation that the move off 7955 makes that level a support for the near term
Hypothesis : Hypo1 )An open below PDH will drive the index down to 8142 and 8110 re- visits where OrderFlow needs to be monitored for buyers. But near 8110 with a 15 point SL if OrderFlow shows buyers for 8142 and 8161. Hypo2 ) If we move above 8165 then NF will probe towards 8204/ 8221. BankNifty Sept F : |
| https://www.dropbox.com/s/7l3uxok62t1wun4/BNF_compo.png?dl=0 |
| Background/ Previous Auctions :
Medium Term- Friday May16th range of 15730- 14430 in spot provides a backdrop to the moves we may see in the BN for some time. There is a 1000 point move in BN when it trades above 15800 spot Our bias is positive above 15100 spot, and as long as the BN stays above 15100 we will trade towards 17680 . Short Term : On the Monthly time frame, support for Sept BankNifty is at 15875 spot followed by 15580. First target would be 16335 spot ( the BN did 16309 today- 11th sept) followed by 16605 spot
Observations in Today’s session : https://www.dropbox.com/s/lg4vnpn8e09hgy8/sept_bnf.png?dl=0 1) The chart above shows buyers near the open at 16015-16050 who controlled the auction 2) vwap of the day placed at 16151 3) The BNF broke over multi day supply at 16230 but was not able to hold the gains. Hypothesis : Hypo1) If 16120 holds at Open then BNF may attempt to rise towards 16230 again. Idea would be to be long with a 30 point stop for 16203/ 16240 near 16120- 16140. Hypo2 ) A cross of 16230 will bring 16310 and 16390 again in BNF. |