Auction Market Theory is all about the migration of value relative to price of yesterday, last week, last month or even last year or the decade if you please. The charts which will post of the weekly and the monthly Nifty below will show value moving up and hence our bias of last week remains intact and up.
Our View last week –” Vwap mentioned last week at 8420 currently is huge support for rest of this week/month and into August also.Objective of the current volumes is at 8750 spot and is resistance for coming week. More likely a 8510 to 8720 trading band for coming week.”
Last week’s post can be found here : http://vtrender.com/nifty-bn-weekly-view-spot-for-20-july-24-july15/
The index worked a 8498- 8654 range against the view stated.
Outlook : View is positive as long as we hold 8455 for the expiry week. 8590 is now resistance for the coming week and 8720/50 now possible only when we close abv 8590 on any daily this week.
We see 8455- 8475 continue as a good support for the index in the coming week. We stick with last week’s view of using this support to build long positions for Aug series with an initial view of 8750 spot.
For the coming week the long liquidation set up near 8590 in the week gone by would mean that the earlier buyers at 8475 and 8455 would be required to re- establish their long bias once price visits that zone again. We see 8590 as resistance and a move above weekly VAH at 8620 would bring fresh momentum to the index again. Thus again we play an 8455- 8720 kind of week with a possibility of 8760 still open. The option build up at 8500 puts and 8700 calls seems to suggest a similar bias by Market Players , but as regular readers of this page would know – first price speaks and then positions are built and our charts have been speaking of the 8500- 8700 range for some time now.
We will update if there is a change.
UPDATE 27th July :
The Nifty broke below 8455 support in the Opening 30 minutes of trade today and collapsed to 8351 by close. There is minor support at 8321 spot for this auction and a bounce to 8450 remains a possibility.
At the moment for this week we are playing 2 possibilities – one is that we close the series or the week at 8455 or we sell off hard to 8212/ 8180 before the month closes.
We will keep an eye on 8321 and even 8455 on spot going forward for the rest of this week.
BankNifty :
We see BN unable to take out last week’s highs and going marginally below last week’s lows.
A view of the BN july Monthly TPO charts show us a nice bell forming and value significantly higher . The vwap of BN for July is at 18610 around the area where price closed on friday.
From the last 2 weeks we have been mentioning 18600 as a good support in the BN. Thus in the coming week we would not like to see BN auction much below 18540 spot to avoid a forced long liquidation play.
On upsides we see 18790 VAL weekly providing initial resistance to the upmove. If that is overcome we could see a sharp move upto 19030 and even an expiry near 19920 in the coming week.
UPDATE 27th July :
The BN should hold support near 18100- 18130 and look for a bounce to the weekly support near 18600. However bounces from that support are likely to meet failure near 18400 regions.
Hence like the Nifty above we remain alert to the possibility of seeing 17830 in this series or by month end.
Follow the KRA’s and daily plans for more