Failed auction

After a big, double distribution ( DD) day yesterday, today’s auction was disappointing from the point of view of sellers as the market did not follow though on the lower distribution and instead chose to build volume in the single prints of yesterday.

We like to think about the DD as two separate auctions and wait for follow through on emerging behavior.

It was noticeable that the market did not successfully auction in the upper distribution of yesterday.We also have the Ray Barros type failed auction today, which we last spoke about in this blog here

Nifty Mp3 Failed Auction

As we head into expiry, the deck is been stacked against the buyers for this series at least.

The market will now have to trade strongly above the failed auction point of 5417 to go higher, then take out the prior pull back low of 5446 before meeting resistance at the HVN of 5478 which was Friday’s close and gap for this week.

Down lower support is at 5340 and near 5312.

Earlier today, we identified 5360 and 5427 NF as the limits for the writers at 5400. With over 140 Lakhs in Open Interest at 5400 May, the volume there cannot be ignored for the remaining two days.

Safe trading.