Levels and Plan for 12th Jan

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).

Until the 16th of DEC 2014  the largest drop was about 450 points for the entire rally from 5110 levels. The drop seen on May 16 th was 432 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 had run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measured 903 points. The drop from 8626 to the  low made on 17/12 of 7961 measures 665 points and violates the 450 points done previously. In such a case the market should drop by an extra 450 points and round off the correction by dropping a total of 900 pints.This would put the correction target at 7726.

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

Weekly levels  : 

(On spot prices)

The move of 6th Jan broke through the support band of 8320 spot- 8290 and collapsed to 8111 levels. The imbalance objective of the move was 8122 spot and the Nifty closed around this objective twice in succession  after putting in a firm bounce from 8065.

Subsequently was have seen the market retrace 61% of the fall but unable to close above 8300 spot levels. For the coming week, support rests at 8224 levels.A close above 8330 spot levels should produce 120 points of upside to 8452 during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was a neutral day with 2 timeframes seen in operation n shorter TF

#) From thursday’s view- The incomplete nature of the second auction opens the possibility of a revisit to this zone even if we move away at open away from the range

#) Volume was 149 L on friday

#) The profile auctioned the volumes of the upper DD of thursday even as it probed the excess of 6th Jan

#) vwap of the day was at 8278 well above the  8228 of thursday

#) Buying excess seen at 8358 F on 2/01 was replaced by selling excess from 8422 which negated the multi day value created from 29/12.

#) The NF has managed to stay above the pull back high of 6th Jan created at 8263

Hypothesis  :

( Based on Futures) 

K.R.A is 8280 ( K.R.A= key reference area)

Hypo1 ) If NF auctions below  8280  then it will move  to 8254 and if 8254 breaks on volumes then NF should see 8205 and 8193 again  Sl for this view will be 8295 initially and 8280 if 8254 breaks.

Hypo1 ) If NF auctions above 8301 then it will move  to 8334 and 8356 . Sl for this view is at 8280.

BankNifty JAN 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.

Weekly levels :

(based on spot prices)

For the coming week 18600 and 18400 spot are 2 supports for the index. The 18860 spot zone has produced selling excess twice in the past 5 sessions indicating sellers mounting supply pressure there. Hence 18860 is short term resistance now. A close below 18600 should confirm a move down to 18400 and 18200 spot during the week.

Observations in Today’s session :

(based on Fut prices)

#) The BNF profile was an outside day with volumes of 35 L

#) From Thursday’s view – The imbalance objective is still at 18912-18960 F

#) vwap was at 18703 against the  18670 of thursday

#) excess seen at 18920 on 02/01 was taken out by excess at 19024 on 6/1

Hypothesis  :

( Based on Futures) 

K.R.A is 18820( K.R.A= key reference area)

Hypo1) If BNF auctions below 18810   then it can move to 18685 and 18590. Sl for this view is at 18878 now.

Hypo2)  IF BNF auctions above 18880  then it will hit 18940 & 19110. Sl for this view is 18810.