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In last week’s post, we expected 2- way moves after the composite weekly had thrown in a bell curve in the week of 11- 15 Jan. We dropped lower and hit the objectives of the down move before a push back and a close at the high volume region of the week.
Refer to last week’s notes posted – http://vtrender.com/nifty-bn-weekly-view-spot-for-18-jan-22-jan16/
USDINR has not been successful to break above 68.06 in the week gone by. We are tracking the auction in the instrument in an indirect way for fund flows and through the auction we hope to see the presence of new buyers / sellers in the instrument. For now, it looks like a test of 68.40 more likely in the USDINR Jan F.
The Vix we are using to track the long put buildup. In the week to come it’ s a pointer to the Options activity of Feb series. We see 17.10 as a support but unlikely to breach above 20.48 in the week. So roughly a 17.10- 20.48 range there. 22.21 is possible if we auction above 20.48. Below 17.10 can drop all the way down to 15.48.
The Nifty may probe above 7440 spot to that composite weekly POC near 7520. We believe that a move to 7520 in the week is a low-risk high reward short opportunity with stops above 7590 for a revisit to 7380/ 7350.
If it stays under 7440 then it may go to retest 7360 immediately and decide the auction path there.
Roughly below 7340, we expect a slide down of 100 points for a repair of the poor lows.
This is the chart of the weekly OrderFlow showing the 2-way nature of the auction. It seems to suggest Sell Higher, Cover Lower.
Opportunity is huge in the coming week to bag 100 points either way- trade correctly with the levels.
BankNifty :
In the week gone by the BN failed a move below 15800 and climbed back up triggering a short covering wave.
The supply zone marked at 15582 in last week’s charts turned out to be the high of the week though
We are clear that the move in the BN was a short covering run mostly by institutions. So we are not expecting a lot of upside.
On the charts besides the 15580 we also see 15770 as an excess in the daily profiles and should be the stop for new shorts initiated in the week.
Thursday’s pull back high of 15220 is a support now on any drops followed by 15160.
And the OrderFlow chart of the past 3 weeks:
It’s expiry week with a holiday in between. If last week was higher risk because of the MO of -100 this week the inventory pressure of options will keep it 2- way and volatile. The dominant trend of the month has always had a big advantage in the expiry week, so it should be the Buyers who should be under pressure. The vwap is 7550 spot and 15785 spot prices developing for Jan.
Trade safe.