Levels and Plan for 12/12

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) 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. Conversely the Nifty has run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measures 903 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 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.  The previous swing high of 8180 spot has excess now and is also a higher support for the index.

Our yearly target of 8580 spot has been hit and the Nifty’s reaction at this price point has been that of consolidation at the highs which increases the chances of further upsides as sellers not seen capable to drive prices lower yet.

Our preferred scenario of a consolidation  move for 8- 12 sessions is playing out fully and we wait for  a Santa rally around Dec 18- 20 to drive the index in the next leg up.

As of the moment, upside is open till 8748- 8788 for dec above 8625 cross . Downsides for  dec should be restricted to lows of  8400- 8349 spot where buyers should respond again. (The level of 8349 was hit in trade on Dec9th and we wait for confirmation here)

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF was in imabalance again but showed initiative selling as well as responsive buying.

#) vwap of the day was at 8346

#) Value was created in the lower part of yesterday’s range .

#) Day auctioned fully below VAL and was a normal distribution with OTF influence

#) Anomalies on any upmove are at 8444 and at 8552 which would be looking fr repairs.

#) The break below previous support of 8540- 8550 is on heavy volumes/

#) Scene of the crime point is at 8552F and will serve as resistance over the next few sessions.

#) The market was successful in auctioning below the Failed auction point of 8540 (2/12)noted earlier last week.

Hypothesis  :

( Based on Futures) 

Hypo1 ) If NF auctions below 8340 then it will drop to 8305 and a further move below 8304 can bring 8271. Sl for this view is 8367.

Hypo1 ) If NF auctions above 8368 then it can rise to 8394 and 8412. sl for this view is 8345.

BankNifty DEC 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)

For the current week the auction has support at 18618  Resistance to the upmove will be at 18934. Auction is positive above 18300 spot and should find dip buyers as long as 18300 is held.

Observations in Today’s session :

(based on Fut prices)

#) The BNF profile was agin mostly inside the range of 9/12 and 10/12

#) vwap was placed at 18456 today

#) the BNF did not follow through much below yesterday’s lows of 18320.

#) Day type was a normal day with some stray either side of IB.

#) excess also seen at 18240 on 28/11

Hypothesis  :

( Based on Futures) 

Hypo1) If BNF auctions above 18505 then it can move upto 18580 and 18610.Sl for this view is 18450.

Hypo2)  IF BNF auctions below 18405 then it will revisit the lows of 18320- 18300. sl for this view is 18460.