Levels and Plan for 02/01/15

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).

Until the 16th of DEC  the largest drop seen on May 16 th was 432 points and the rally from 5110 was never penetrated by a drop of more than 450 points. In the current context the drop from the last Nifty spot swing high of 8180 to the recent swing low of 7723 made on 17/10 equals 457 points. Conversely the Nifty had run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measured 903 points. The drop from 8626 to the  low made on 17/12 of 7961 measures 665 points and violates the 450 points done previously. In such a case the market should drop by an extra 450 points and round off the correction by dropping a total of 900 pints.

There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point for the future.

Short Term : 

(On spot prices)

The Nifty has managed to stay above the longer time frame supply at 7920- 7940 spot. This region is also now new support over the short term. Over the coming week resistance likely to build at 8351- 8399 spot . Support would be at 8125 during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile continues to show a sideways auction from 23/12.

#) Volume was very poor at 38 L only today

#) If volumes do not increase in the session tomorrow then we can have the Nifty closing around 8320 F again.

Hypothesis  :

( Based on Futures) 

Hypo1 ) If NF auctions below 8336 then it will drop to 8313 an 8285. Sl for this view below 8336 is at 8357.

Hypo1 ) If NF auctions below 8358 then it will rise to 8381 and 8423. Sl for this view above 8358 is at 8337.

BankNifty JAN F :

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.  Our 2014 target of 17680 has been met. Larger Imbalance objective above 17680 works out to 18700- 18934. (The High made on 07/12 was at 18875 spot.) Meanwhile 17680 – 17710 is developing as a nice base and a support line for the medium  term

Short term :

(based on spot prices)

The Banknifty was confined to a 18580- 18200 kind of range even as Nifty auctioned down. When the support at 18200 gave way during the week, the BN  lost 400 points quickly. However 18200 has been reclaimed again.   The regions around 17680- 17750 have multiple supports for the index now.

Observations in Today’s session :

(based on Fut prices)

#) The BNF profile operated in the same range as wed excet for a few opening ticks

#) vwap was at 18862

#) Profile shows minor excess at the open at 18775 .

Hypothesis  :

( Based on Futures) 

Hypo1) If BNF auctions above 18870  then it can move to 18930 nd 19030.. Sl for this view is at 18835 now.

Hypo2)  IF BNF auctions below 18830  then it will hit 18790 & 18720 again. Sl for this view is 18884.