Levels and Plan for 03rd Feb

Medium Term : On Friday May 16th 2014, we saw a  range of 7560- 7125 (spot prices) and we believe it  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).

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

There is another failed auction at the lows on 19/01 at 8530 which should form another supporting base for the index

At the end of Dec 2014 we had reason to believe the the long auction in the medium term which started at 5920 early in 2014 may be consolidating for some time. However the Jan auction shows that the move has not terminated yet and we still looking at 10400- 10800 targets through the coming year as long as we stay above 7200 now.

Weekly levels  : 

(On spot prices)

For the coming week the Nifty should be looking to get supports in the 8701- 8728 spot zone.( day low of 02/02 was 8751)

Resistances to the upmove will be at 8883 and then 8930/60. 9018 is the objective if we cross over 8960 this week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was a neutral center with a strong buyer at 8806 and seller at 8912

#) vwap of the day was at 8850 with volume of 105 L.

#) Auction was probing the extremes today for price confirmation but reverted back suggesting a sideways mode on.

#) Profile of 30/01 confirms what we stated based on the 28/01 profile that the up auction is moving into a sideways mode and price adjustments.We looks forward to the anomaly adjustments noted below.

#) Scene of the crime is at 8958 which may suggest a move up to 8958 to check for business interests before any significant moves either way.

#) Profile of 28/01 shows excess at the highs of 9064 which could signal an end to the up auction from 15th Jan.

#) Day Profile of 20/01 shows anomalies in structure at 8733, 8714, 8686 which need repair in the coming sessions

#) There is a failed auction noted at the lows of 8590 on – 19/01 which has not been revisited and hence a support for FEB

Hypothesis  :

( Based on Futures) 

K.R.A is 8890 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above 8890  then it will move to 8918  and only above 8919 the move is to 8950 and 8985 possibly  . Sl for this view is at 8962  .

Hypo2 ) If NF auctions below 8849 then it will move  to 8806 and 8776  Sl for this view will be 8890.

BankNifty FEB F :

18400 BN spot will be the key level to watch in BN over the coming weeks on a closing basis. As long as price stays above 18400 weekly closing the BN can make a move to 23500 levels. Highest volume traded in BN in 2014 was at 15100- 15200 spot levels. This 15100 will be the second layer of support in BN below 18400.

BN weakened considerably last week by exhibiting a drop below 20050 levels. We now feel that a test of support is called for in the 19250 to 19500 zone before any more upsides.

Weekly levels :

(based on spot prices)

For the coming week resistance to any move would be 19980- 20050 levels.( The high of 2/2 is at 19991)  Further upsides in the index possible only if 20050 is scaled on closing basis.

19760 was an important level which got hit in friday’s selloff. We believe the structure below 19760 is very poor inviting quick drops to 19416 and 19232 during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The BNF profile was a neutral extreme day

#) vwap was at 19913 today with volumes of 32.3 L

#) The profile of 31/01  left behind anomalies at 20128 and 20360 in the Feb F

#) The anomaly of 20128 is repaired on 02/02

#) Anomalies in the profile of 27/01 at 20482 were repaired

#) VPOC of 31/01 placed at 20256.

#) Long excess seen at 19700 on 21/01 is support on any pullbacks

#) Selling tails seen at 21130 on 28/01

Hypothesis  :

( Based on Futures) 

K.R.A is 19906 ( K.R.A= key reference area)

Hypo1) If BNF auctions above  19910   then it can move to 20036 and 20250 vpoc / 20396 again  .  Sl for this view is at 19831 now

Hypo2)  IF BNF auctions below 19830  then it will move to 19740  and 19290  . Sl for this view is 19918