Levels and Plan for 15th Jan

Medium Term : 

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)

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.

With 2 sessions left that close has not come and we fell down to 8236 today close enough to the support at 8224, which now should be tested.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was a normal variation type again with a negative range extension below the IB hour again.

#) Volume was 125 L  and higher than yesterday

#) The profile is confirming the sideways distribution we spoke of first yesterday also called step 2 in the SteidlMayer Process

#) OrderFlow showed sellers closing positions between 8244-8265 and the NF recapturing the 8280 zone.

#) The excess of 6th Jan remains and is not completely visited yet

#) vwap of the day was at 8298 well below the  8349 of Tuesday

#) 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.

Hypothesis  :

( Based on Futures) 

K.R.A is 8332 ( K.R.A= key reference area)

Hypo1 ) If NF auctions below  8307  then it will move  to 8271 and 8244   Sl for this view will be 8333.

Hypo2 ) If NF auctions above 8349 then it will move  to 8389 and 8422/ 8448 . Sl for this view is at 8332.

BankNifty JAN F :

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 covered the low volume zone of yesterday and also moved to excess lows of 12/ 01

#) Volumes were at 32.2 L

#) vwap was at 18690 against the  18874 from yesterday

#) The excess of 12th Jan is now covered.

Hypothesis  :

( Based on Futures) 

K.R.A is 18744( K.R.A= key reference area)

Hypo1) If BNF auctions below 18690   then it can move to 18605 and 18560.  Sl for this view is at 18744 now

Hypo2)  IF BNF auctions above 18750  then it will hit 18820/ 18870  . Sl for this view is 18685.