Levels and Plan for 14th Nov

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)  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. 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 marked 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. Resistance likely to play out first near 8380 and if crossed near 8544-8580 spot.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF got dragged back in the bracket below 8417 and the imbalance move was curtailed.

#) Today’s profile chart shows a seller aggressive at the open and driving prices down .

#) The business area remains 8410- 8325 and an extension above has been rejected.

#) vwap placed at 8394 today below the 8427 of yesterday ( change alert)

#) The range of the Move seems to be settling down now between 8260- 8514 F. Cmp 8380 NF

#) Failed auction seen at 7752 F  on 18/10. Hence the IPM off 7752 is a strong move as FA point was not visited.

#) We see buying excess at 8232 on 31/10 and at  8122 seen on 30/11. Both these points are supports for the short term trader.

#) Pull back low was at 8311 against the pull back low if 8182 seen on 30/10

#) Auction is now past the IPM stage and onto Step2 of the SteidlMayer distribution model

Hypothesis  : ( Based on Futures) 

Hypo1  ) If NF holds above 8399 during the auction tomorrow then small longs can be taken for 8416 and 8431 with stops below 8371.

Hypo2 ) If the auction goes below 8370 then NF can drop to 8335 and 8312.

BankNifty NOV 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 bias is positive above 15100 spot, and as long as the BN stays above 15100 we will trade towards 17680 ( The BN hit 17651 on 13/11/14) 

Short term :

(based on spot prices)

For the coming week the auction at 17230 spot will be watched for signs of momentum change.

Observations in Today’s session :

(based on Fut prices)

#) The BNF saw supply mounting again today near 17740 and the index came off the highs

#) The profile  showed aggressive sellers at 17735 today and a profile with a b shape suggesting forced long liquidation.

#) The day closed near the previous reference area of 17520 F

#) vwap of the day was at 17570 against the  17644 of yesterday

#) Short term picture would put the index at 17300 F support if it goes below 17460 tomorrow.

#) Pull back low was 17024 on 31/10 and found new buyers there on 3/11 . 17024- 17040 is now a huge support for the BNF.

# Buying excess visible at 16856 F on 31/10 and value was created higher.

Hypothesis  : ( Based on Futures) 

Hypo1) IF BNF stays below 17548 then it will revisit 17470 to check business. A move below 17465 would bring 17300 . Sl for this hypo to play out fully is 17634.

Hypo2) If BNF auctions below 17635 then it will rise again to 17730 . sl for this view is 17540.