The Imbalance created off 8007 on expiry day continued today to 8139 which was near the Steidlmayer Imbalance target given yesterday even as signs appeared that the market will go back into balance in the next session.
As Markets move beyond all time highs it’s these wonderful projected values off our Market Profile Charts which will keep giving us an edge as we probe higher into unchartered areas.
Nifty Sept F
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 remain 7900 spot (achieved) and 8300/ 8581 in the medium term. Support at 7500/ 7100 spot.
Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015
Short term :
Today was evidence that step 2 of the Steidlmayer distribution discussed here is Over and the Markets head back to Imbalance. In such a scenario the first imbalance target of the new move will be 8104-8124 (achieved on 02sept)
On the Monthly Time frame we see September Nifty having supports at 7835 and 7706 on spot levels and targets of 8068 spot (done) and 8226 spot.
Support for the current week has moved upto 8062 F from the 7950 Sept F given earlier in the week.
Observations in Thursday’s session :
1) A Trend structure for the second day in a row. However OrderFlow was not very supportive of a sustained rise today.
2) vwap of the day was at 8100 up from 8048 yesterday. Hypo1 estimates were again met fully.
3) Day type was a normal variation day and the market made it to 3 multiples of the day’s Initial Balance (IB)
4) Failed auction noted at 7955 on 27/08 is on day T+3 now
5) Single prints noted at 8016 would indicate a new support base near 8016.
Hypo1 ) We have noted days which do 3I make highs in the first hour of the next session. Accordingly our trade tomorrow would be to short an open below 8134 for 8112 support of the afternoon and 8087 again. Sl for this move will be 8148.
Hypo2 ) If we stay up above 8139 tomorrow post the first hour then NF would invite short covering and rise to 8174 and 8193 again.
BankNifty Sept F :
Background/ Previous Auctions :
Friday May16th 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 .
Short Term :
On the Monthly time frame support for Sept BankNifty is at 15580 spot followed by 15200- 15100 mentioned above. First target would be 16335 followed by 16795.
For the week support moves to 16110 up from 15683 sept F given 2 days back. If 16124 sustains then BNF would trade upto 16526 during the week
Thursday Observations :
1) A 2 sided auction mostly in a range
2) vwap of the day placed at 16177 up from 16008 from yesterday.
3) Day shows a prominent POC at 16180 equally controlled by buyers and sellers
4) Pull Back low from 01/09 was at 16004 and would be an important point for the coming sessions
5) Hypo2 estimate of 16257 was short by 8 points.
6) The Imbalance of yesterday showed signs of forming a balance today
Hypo1) Bias to be considered positive tomorrow if we stay above 16170 prominent POC in which case the BNF can test the supply near 15240 again.
Hypo2 ) Below 16151 the BNF will run down to 16115 and 16060 again.