The Market was slightly imbalanced last Wednesday with a tilt towards the downside. This morning Buyers tried to seize control of the market in the morning, failed considerably and the market fell under it’s own weight.
Nifty OCT 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 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 :
1) A normal variation day which saw buyers in the morning turn into sellers at the close
2) Today’s chart shows buyers dominating from 7936 early in the session but a seller coming at 7956 as per hypo1 and forced liquidation by longs from below 7927.
4) Data shows long liquidation again in the 7936- 7910 zone to add to the 8010- 8015 zone of last wed.
5) 8020- 8056 remains a poorly auctioned zone
6) Profile was imbalanced towards the upside at the close slightly but did not show a lot of aggressive shorting taking place in the day.
Hypo1 ) An auction above 7910 tomorrow ould mean a retest of the 7936 zone and a possible 7955- 7070 visit. Sl for this long view above 7910 would be 7883.
Hypo2 )Below 7910 tomorrow the seller retains his edge and there will be further long liquidation if the NF falls below 7883 F where it can go to 7836- 7839 F.
BankNifty Oct F :
|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 17680Observations in Today’s session :
1) The profile in the BNF was balanced today and rotational in a 180 point range
2) The Sellers were seen at 15342 today and below 15310 to add to those previously operating near 15410 on wed and at 15660 .
3) day type was normal day again
4) The BNF closed at the lows and at support mentioned.
Hypo1) If we stay below 15290 tomorrow then BNF can move to support at 15227- 15240. Below 15227 it can drop fast to 15101/ 15051 F
Hypo2 ) Above 15295 it will move towards the seller at 15345 and a move above that will bring 15400..