A few days back we had posted a profile of the Bank Nifty future showing the auctions of 2 months- Dec and Jan.
As the market gets ready to adjust inventory on RBI news flow, let's look at the same 2 profiles on the spot price.
The green tpo's and the while shaded region represent the value areas or the zone where the market traded 68.3% of the time. These are established as value or the region the markets liked to trade.
Notice that Jan is higher than Dec as we got the swing up early in the month.
Now the profile on the extreme right is the developing profile of the day and our region of focus ahead of the announcement on Tuesday.
As can be seen this current auction is placed exactly between the 2 value areas.
It's also easy to see how a big move will come about on Tuesday as the market auctions either through the Jan value area or the Dec One on news flow and inventory adjustments. As we say often in the room, it's not the news but the reaction to the news which brings about changes in trading positions and biases ( called inventory in the trading room).
So the move is from 12632 spot to 12808 or from 12504 spot to 12280 spot. Both moves in out opinion will be swift ones piercing through the value areas.