Levels and Plan for 13th 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.

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 normal variation type with responsive buyers at previous POC

#) Volume was 98 L on Mon

#) The profile continues to build value higher (4th day)

#) The profile continued to probe  the excess of 6th Jan as it did on friday

#) vwap of the day was at 8314 well above the  8278 of Friday

#) 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 again today

Hypothesis  :

( Based on Futures) 

K.R.A is 8338 ( K.R.A= key reference area)

Hypo1 ) If NF auctions below  8338  then it will move  to 8308 and if 8308 breaks on volumes then NF should see 8280 again  Sl for this view will be 8363.

Hypo1 ) If NF auctions above 8369 then it will move  to 8422 and 8448 . Sl for this view is at 8338.

BankNifty JAN F :

 Medium Term-  

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 inside day which operated the range of friday

#) Volumes was 27L

#) vwap was at 18782 against the  18703 of Friday

#) Profile shows buying excess at 18576 now

#) excess still at 19024 from 6/1

Hypothesis  :

( Based on Futures) 

K.R.A is 18814( K.R.A= key reference area)

Hypo1) If BNF auctions above 18820   then it can move to 18920 and above 18920 we should see a move to 19020. Sl for this view is at 18764 now and at 18830 for second move

Hypo2)  IF BNF auctions below 18810  then it will hit 18720 . Sl for this view is 18865.