Tomorrow is RBI day. If the first session of the new series showed lack of the initiative selling seen on expiry day, then today’s session showed us shorts covering in the region of 8004- 8020. Into the event of the day we will see the changes it has on existing inventory of holders .
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Nifty OCT F |
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Background / Previous Auctions : 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) ( Friday 8th Aug – low was 7540 and close of 7568) The largest drop seen on May 16 th was 432 points and the rally from 5110 has never been penetrated by a drop of more than 430 points . Targets for the Upmove as long as 7900 spot holds (+/- deviation of 50) are 8300/ 8581 in the medium term. Support at 7900/ 7500 spot. Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015
Observations in Today’s session : https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0 1) A normal day with a range mostly in the IB zone. 2) vwap of the day was at 8013 3) OrderFlow shows sellers from 23/09 liquidating a majority of short positions in the market. 4) Today’s data shows strong buying ( shortcovering) in the 8012- 8018 zone 5) Buyers were seen defending 8090 marked out as an important level in hypo1 6) Profile was imbalanced towards the upside Hypothesis : Hypo1 ) An auction above 8016 tomorrow will bring 8036 again with a stop loss below 7999 and a possible 8056. A bigger move of 40 points will emerge if we climb above 8056 towards 8106. Hypo2 ) Below 8010 the NF will rotate down to 7990 and 7970 again. However if 7959 breaks then the auction can run down to 7900 again. BankNifty Oct F : |
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Background/ Previous Auctions :
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. There is a 1000 point move in BN when it trades above 15800 spot Our bias is positive above 15100 spot, and as long as the BN stays above 15100 we will trade towards 17680
Observations in Today’s session : https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0 1) The basic auction was in the 15500- 15700 low volume zone pointed out yesterday 2) vwap of the day placed at 15617 3) The Sellers were seen operating near 15660 but buyers came at the close near 15500 4) profile was evenly distributed in the center 5) day type was normal variation Hypothesis : Hypo1) If we stay above 15475 a the Open then BNF can move to 15630 and a cross of 15660 wil bring 15750 easily in BNF. Hypo2 ) Below 15470 the BNF will fall again to 15350 and 15275. |