The markets open tomorrow after a day’s gap and will immediately react to 2 conflicting pieces of news – one that of the riling party at the center getting stronger nationally and 2 of the sell off in the US markets. It would be a time not to be rigid of your view but to go with the flow of the market
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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 .
In the current context the drop from the Nifty spot high of 8180 to the recent low of 7796 equals 384 points. A 432 point drop places the nearest support at 7748 spot. Reaction theory would state that if 7752 is violated then the Next drop could be upto 7320 spot.
Short Term :
Supports are at 7786-7752 spot. Resistance to the upmove now at 7958 spot. A break of 7752 invites 7628 and lower immediately. A move above 7980 will fuel a short covering move to 8180 levels. All short term levels are on the spot.
Observations in Today’s session : https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0 1) A 3-1-3 profile with Orderflow well balanced but longs from the lows of 7845 covering near the close to leave a very small negative orderflow. This profile structure means the day’s lows have to break for a trending move. 2) Today’s chart shows buyers again defending the levels around 7840 as we saw on Monday but sellers came aggressively around 7823 3) Day shows a prominent POC at 7894 which is the intra day bias point in the range of the day. 4) Composite multi session profile is not showing sellers pushing at the lows but defending prices near 7950 aggressively. Hypothesis : Hypo1 ) Buyers of tuesday and Monday are under pressure if prices stays below 7868 tomorrow. Below 7868 it goes to test 7845 then 7817 and can go below to even 7761 F. Hypo2 ) Above 7918 F the buyer exerts more control on the auction and prices can rise to test the seller at 7844 and even go to 7983F. 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
Short term : Support in BN would be now at 15510 spot ahead of the 15100.Resistance is still there at 15860-15910 spot short term and may not be easy to break up .
Observations in Today’s session :
https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0 1) The profile in the BNF was a neutral center with a close near the day’s POC of 15800 F 2) Buyers were seen operating from 15630 but some long liquidation observed near 15860. 3)OrderFlow went marginally negative at the close as responsive buyers preferred to book gains made during the day
Hypothesis : Hypo1) If we stay below 15721 at the Open then BNF can go towards 15622 support. A move below 15620 would bring 15520 and 15340 below it easily 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 and 16158 above that. |