Levels and Plan for 12/11

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 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. 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 marked 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.  The previous swing high of 8180 spot has excess now and is also a higher support for the index. Resistance likely to play out first near 8380 and if crossed near 8544-8580 spot.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

https://www.dropbox.com/s/b89gob2pg3ta5c3/NF_OF_10.png?dl=0

#) Today’s profile chart showed long liquidation near the open and responsive buying at the lows.

#) The range of the Move seems to be settling down now between 8260- 8514 F. Cmp 8395 F

#)For the third day the market again failed to show increased sellers at 8356 minus and closed higher

#) In the extreme short term the business area is 8410- 8325 with extremes being tested and the profile is getting balanced.

#) vwap placed at 8383 today

#) Failed auction seen at 7752 F  on 18/10. Hence the IPM off 7752 is a strong move as FA point was not visited.

#) We see buying excess at 8232 on 31/10 and at  8122 seen on 30/11. Both these points are supports for the short term trader.

#) Pull back low was at 8311 against the pull back low if 8182 seen on 30/10

#) Auction is now past the IPM stage and onto Step2 of the SteidlMayer distribution model

#) Day range was within the composite of the last 3 days

Hypothesis  : ( Based on Futures) 

Hypo1  ) If NF actions above 8416 then new longs can be taken for 8444 and 8495 as mentioned in the previous posts. Sl for this move will be 8371.

Hypo2 ) If the auction goes below 8346 then it will test 8326 and the pull back low of 8304-8310 and 8258

BankNifty NOV 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. 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 :

(based on spot prices)

Support for the BN spot is now firmly at 15910- 16000 up from the 15100 spot previous.For the coming week the auction at 17230 spot will be watched for signs of momentum change.

Observations in Today’s session :

(based on Fut prices)

https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0

#) The profile  showed strong responsive buyers at 17300 for the third straight day  who managed to close the index higher

#) The day shows a spike into the close and hence spike rules will apply

#) vwap of the day was at 17416

#) Pull back low was 17024 on 31/10 and found new buyers there on 3/11 . 17024- 17040 is now a huge support for the BNF.

# Buying excess visible at 16856 F on 31/10 and value was created higher.

Hypothesis  : ( Based on Futures) 

Hypo1) IF BNF auctions above 17585 then it can will  to 17687 and 17740. Sl for this view will be 17510.

Hypo2) If BNF auctions below 17470 then it should rotate back to 17400 and again go back to test 17300 if 17400 breaks.