The small balance created on thursday gave way to another round of imbalance as the week finished at the lowest point .
|Nifty DEC 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) 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. Conversely the Nifty has run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measures 903 points. The drop from 8626 to last week’s low of 8216 measures 410 points already and within 40 points of the major correction of 450 points.
There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point for the future. Above 7723 the support for the Nifty is at 8180 levels, the previous swing high.
Short Term :
(On spot prices)
The Nifty 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. However if 8180 breaks as support there will be a panic drop of 140- 200 points to 8040/ 7980 quickly.
Our yearly target of 8580 spot has been hit and the Nifty’s reaction at this price point has been that of consolidation of price at the highs and then a price correction which is so far within the 450 point correction seen previously.
As of the moment, the imbalance created on the downside should not exceed 8180- 8140 on the downside for this month. If these levels hold during the coming week, then responsive buying should emerge to close the index near 8400 levels at the turn of the month/year.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF was in imbalance again and showed sellers dominating to finish the week at lows.
#) vwap of the day was at 8312
#) Value was again created lower.
#) Day auctioned fully below VAH and was a normal variation with OTF influence
#) Anomalies on any upmove are at 8444 and at 8552 which would be looking fr repairs.
#) The break below previous support of 8540- 8550 is on heavy volumes/
#) Scene of the crime point is at 8552F and will serve as resistance over the next few sessions.
#) The market was successful in auctioning below the Failed auction point of 8540 (2/12)noted earlier last week.
( Based on Futures)
Hypo1 ) If NF auctions below 8265 at the open then it can drop to 8224 and below 8222 to 8165 in the firsts session. Sl for this view is 8297.
Hypo1 ) If NF auctions above 8312 then it will move to 8340 and 8362. Sl for this view is at 8296.
BankNifty DEC F :
|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. Our 2014 target of 17680 has been met. Larger Imbalance objective above 17680 works out to 18700- 18934. (The High made on 07/12 was at 18875 spot.) Meanwhile 17680 – 17710 is developing as a nice base and a support line for the medium term
Short term :
(based on spot prices)
The Banknifty has been confined to a 18580- 18200 kind of range even as Nifty has auctioned down. If support at 18200 gives way during the week, then BN can lose 400 points quickly and fall to 17800 levels. the regions around 17680- 17750 has multiple supports for the index and a failure here would invite 17370 again.
Observations in Today’s session :
(based on Fut prices)
#) The BNF profile was again an inside day
#) vwap was placed at 18491 today
#) the BNF did not follow through much below previous lows of 18320.
#) Day type was a neutral extreme with a close at lows.
#) excess also seen at 18240 on 28/11 is support below 18300.
( Based on Futures)
Hypo1) If BNF auctions above 18300 then it will drop to 18240 and possibly 18020 if 18240 does not hold. Sl for this view will be 18345.
Hypo2) IF BNF auctions above 18350 then it will move to 18430 and 18510. Sl for this view is 18290.