The market was again volatile in this range as it has been, but the buyers at 8080 responded again to lower prices . That is now 3 times since last wednesday and we know with every visit it will get weaker
EOD data at the close today showed NF reducing more longs and BNF lost all the Open Interest it added and a bit more on the failed break above 16300 F.
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 7900/ 7500 spot.
Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015
Short term :
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 8300 spot.
The Market is consolidating in a broad 100 point range between 8075- 8175 and once this consolidation is over the Sept F should go to 8330 F and 8487 F during the current series. On the lower side the NF should find support at 7860- 7900 during the series on any big downturns.
On the weekly TF the Sept F has support for the coming week at 8071 and 8041 and resistance at 8228/ 8280 and 8338 in that order.
Observations in Today’s session :
1) The nF showed excess at 8148 plus for the second straight day
2) Sellers stepped in again today during the session but buyers came back strongly at lower levels.
3) vwap of the day was at 8113 down from the 8133 of yesterday
4) Auction closed below 8140 for the second straight session.
4) Failed auction noted at 7955 on 27/08 is on day T+7 now. Since it was not visited we now have confirmation that the move off 7955 is a stronger IPM than originally thought and the market makes 7955 a bigger support.
5) Single prints noted at 8016 on 01/09 would indicate a new support base near 8016.
Hypo1 ) 8110 – 8116 is our ref area into tomorrow dividing the auction into 2 parts between 8080 and 8140. Below 8110 the market goes to look at 8072 again. Possibility of a drift lower to 8020 exists below 8071.
Hypo2 ) a cross of 8140 would setup a short covering move towards 8164 and 8197 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 15875 spot followed by 15580. First target would be 16335 spot ( the BN did 16309 today- 11th sept) followed by 16605 spot
On the weekly TF the BNF has support at 15960 and 15801 during the week. Resistances would be at 16409 and 16561 during the coming week
Observations in Today’s session :
1) The BNF failed to cross above 16310 with good aggressive buying volumes.
2) vwap of the day placed at 16283 up from the 16163 of yesterday
3) Profile broke above the 3-1-3 distribution of 16105- 16279 range but BNF came back inside.
Hypo1) We are looking to sell near 16280 with stops above 16325 for 16210 and 16135.
Hypo2 ) Above 16335 if BNF shows good aggressive buyers then longs would be in play for 16410 with stops below 16270.