The market opened near the 8140- 8180 spot levels and found a buying response early in the day, but the strength of the bounce was not enough to carry the market above VAL of the previous session and the NF finished near friday lows again
|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 today’s open of 8152 measures 474 points though the F did not see as big a fall.
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 showed responsive buying at the open which took the market near last week’s lows.
#) vwap of the day was at 8263
#) Value was again created lower.
#) Day auctioned fully below VAL and was a normal variation with OTF influence
#) Anomalies on any upmove are at 8444 and at 8552 which would be looking for 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 8172. Sl for this view is 8297.
Hypo1 ) If NF auctions above 8289 then it will move to 8312 and 8346. Sl for this view is at 8275.
BankNifty DEC F :
|Background/ Previous Auctions :
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 inside the range seen since 9/12
#) vwap was placed at 18481 today
#) the BNF did not follow through much below previous lows of 18300.
#) Day type was a normal day with OTF influence
#) excess seen on 15/12 at 18312.
#) excess also seen at 18240 on 28/11 is support below 18300.
( Based on Futures)
Hypo1) If BNF auctions above 18470 then it can move to 18560 and 18610. Sl for this view s 18430.
Hypo2) IF BNF auctions below 18390 then it will hit 18300 again. Sl for this view is 18430.