Levels and Plan for 26th Dec

 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). Until the 16th of DEC  the largest drop seen on May 16 th was 432 points and the rally from 5110 was never penetrated by a drop of more than 450 points. In the current context the drop from the last Nifty spot swing high of 8180 to the recent swing low of 7723 made on 17/10 equals 457 points. Conversely the Nifty has run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measures 903 points. The drop from 8626 to the  low made on 17/12 of 7961 measures 665 points and violates the 450 points done previously. In such a case the market should drop by an extra 450 points and round off the correction by dropping a total of 900 pints.

There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point for the future. A drop of 900 points from 8626 will leave us with 7726 just at this reference point.

Short Term : 

(On spot prices)

The Nifty has managed to stay above the longer time frame supply at 7920- 7940 spot. This region is also now new support over the short term. Over the coming week resistance likely to build at 8351- 8399 spot . Support would be at 8125 during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF auctioned below the DD profile made on 23/12

#) vwap was at 8311 today

#) Value was created lower after 4 days of UP sessions in value terms

#) The break below previous support of 8540- 8550 is on heavy volumes/

#) Scene of the crime point is at 8552F and will serve as resistance over the next few sessions.

#) The market was successful in auctioning below the Failed auction point of 8540 (2/12)noted earlier.

Hypothesis  :

( Based on Futures) 

Hypo1 ) If NF auctions below 8259  then it will fall to 8202 .SL for this view  will be 8278

Hypo1 ) If NF auctions above 8290 then it will rise  to 8319  . Sl for this view is 8263.

BankNifty JAN F :

Medium Term-  

Friday May 16th range of 15730- 14430 in spot provides a backdrop to the moves we may see in the BN for some time.  Our 2014 target of 17680 has been met. Larger Imbalance objective above 17680 works out to 18700- 18934. (The High made on 07/12 was at 18875 spot.) Meanwhile 17680 – 17710 is developing as a nice base and a support line for the medium  term

Short term :

(based on spot prices)

The Banknifty was confined to a 18580- 18200 kind of range even as Nifty auctioned down. When the support at 18200 gave way during the week, the BN  lost 400 points quickly. However 18200 has been reclaimed again.   The regions around 17680- 17750 have multiple supports for the index now.

Observations in Today’s session :

(based on Fut prices)

#) The BNF profile auctioned  below the DD range of 23/12

#) vwap was at 18796

Hypothesis  :

( Based on Futures) 

Hypo1) If BNF auctions above 18639  then it can move to 18712. Sl for this view is at 18600 now.

Hypo2)  IF BNF auctions below 18577 then it will hit 18520 again. Sl for this view is 18612