Friday the market spent the early part of the day in a 25 point range within a 125 point range as it wondered all the release of data after the close. It eventually closed at session highs.
EOD data at the close today showed NF reducing more longs and BNF adding some long exposure again after giving up most of the previous holding added a day before.
Nifty Sept 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) ( 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 remain 7900 spot (achieved) and 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
Short term :
On the Monthly Time frame we see September Nifty having supports at 7835 and 7706 on spot levels and targets of 8068 spot (done) and 8300 spot.
The Market is consolidating in a broad 100 point range between 8075- 8175 F. The path of least resistance now seems to be downwards and pointing towards a destination trade of 8020 F. Below 8020 F it may just move towards 7970 F though likely to bounce back up from around there. ( refer points 5 & 6 below in Obs)
On the weekly TF the Sept F has support for the coming week at 8071 and resistance at 8248.
Observations in Today’s session :
1) The NF went to probe the supply at 8048 but was not successful in surpassing it.
2) vwap of the day was at 8117 almost the same as the 8133 of yesterday
3) Day type was a neutral extreme
4) Auction closed at 8140 which was also the vwap of the trading week.
5) Failed auction noted at 7955 on 27/08 is on day T+7 now. Since it was not visited we now have confirmation that the move off 7955 is a stronger IPM than originally thought and the market makes 7955 a bigger support.
6) Single prints noted at 8016 on 01/09 would indicate a new support base near 8016.
Hypo1 ) Since we finished neutral extreme an open which fails to take out 8148 would mean the price probe higher off 8118 was a mere short covering event and the market will drift down below 8115 again. Price targets below an 8115 open will be 8072 and 8032
Hypo2 ) a cross of 8149 would setup a short covering move towards 8164 and 8197 again.
BankNifty Sept F :
Background/ Previous Auctions :
Friday May16th 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 .
Short Term :
On the Monthly time frame, support for Sept BankNifty is at 15875 spot followed by 15580. First target would be 16335 spot ( the BN did 16309 today- 11th sept) followed by 16605 spot
On the weekly TF the 1st line of support in BNF will be at 16200 and then at 16030 during the week. Resistances would be at 16409 and 16561 during the coming week
Observations in Today’s session :
1) The BNF showed buying volumes into the close
2) vwap of the day placed at 16257 down from the 16283 of yesterday
3) Profile closed above the 3-1-3 distribution of 16105- 16279 range but did not take out previous day’s highs.
Hypo1) An aggressive long bias can be taken if 16270 is held near open. However a break there would mean 16205 all over again. Targets above 16270 are 16364 and 16516 on intra scale,
Hypo2 ) Below 16200 the BNF will break towards 16130 and 16060.