A gap down, a rise from the gap down and a close at the lows was the auction last friday as Buyers and Sellers debated fair value for the curret trade with no consensus.
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Nifty OCT F |
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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 as long as 7900 spot holds (+/- deviation of 50) are 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
Observations in Today’s session : https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0 1) A neutral day as thursday’s late sellers capitalized and closed some short positions during the trade 2) Today’s chart shows a profile which was a having both time frames and a neutral look. 3) Orderflow Data shows buy pressure at the lows which could be caused by Thursday’s shorts booking profits. 7936 and above had sellers coming back.
Hypothesis : Hypo1 ) An auction below 7870 would mean a visit to 7796/ 7794 . Shorts are firmly in control till NF does not trade above 7902 tomorrow which could be a good sl for existing short positions. Hypo2 ) above 7917 the NF can trade back up to 7948 and 7983. BankNifty Oct F : |
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| Background/ Previous Auctions :
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
Observations in Today’s session :
https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0 1) The profile in the BNF shows sellers coming back strongly again from 15650 levels 2) Buyers were missing for the session on friday 3) day type was a normal variation which closed the gap left by Thursday’s up auction 4) profile was slightly imbalanced towards the downside at the close . Hypothesis : Hypo1) If we stay below 15460 then BNF can drop down 250 points to 15240 where buyers would attempt to respond again. Minor support below 15240 is at 15190
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