Consensus on value still is undecided in the market in an auction mainly dominated by the seller who is not selling at the lows but content on adding shorts at higher levels.
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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 trend day with strong buyers early in the session near 7830- 7840 F. 2) Today’s chart shows a profile which was dominated by the buyers mostly. 3) Orderflow Data shows buyers at the lows below 7850 and sellers coming back into the auction from 7860 onwards Hypothesis : Hypo1 ) An auction below 7919 tomorrow would bring 7894 into play immediately and if we stay below 7894 then NF will go back to test 7860 again. Hypo2 ) Above 7924 the NF will go towards 7948 and above 7948 a short covering move to 7983/ 8008. 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 was an Open Rejection reverse which closed near the day’s high point. 2) Buyers were seen operating from 15460 to 15660 but the region above 15660 showed sellers. 3) day type was a trend day which opened at one end and closed at the other. 4) profile was slightly imbalanced towards the downside at the close . Hypothesis : Hypo1) If we stay below 15721 at the Open then BNF can go towards 15622 support. A move below 15620 would bring 15520 again where ordeflow needs to be watched again.
Hypo2 ) If we continue above 15750 then BNF can move into the single prints and target 15870 again. A possible extension above 15870 can give another 100 points easily to 15970. |