Levels and Plan for 16th Sept

The market gapped down today met buyers at the lows who tried defending the lower prices but long liquidation followed in the afternoon as previous supports turned into resistances

EOD data at the close today showed NF reducing 4875 contracts  and BNF reducing 1536 contracts. The total Index Futures Open Interest is now at 379989 contracts . This data points to another down day tomorrow ( Close < prev close)

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 support for this week at 8071 stands broken and will turn into resistance .The second resistance is at 8148.

Observations in Today’s session :


1) The NF gap lower met buyers but most of them liquidated at higher levels during the day

2) vwap of the day was at 8067 from the same as the 8117 of yesterday

3) Day type was a normal day where activity happened in the first hour

4) Auction shows excess at 8100 in the form of the gap indicating short term resistances building

5) Failed auction noted  at 7955 on 27/08 . Since it was not visited we now have confirmation  that the move off 7955 makes that level a support for the near term

6) Single prints noted at 8016 on 01/09 would indicate a new support base near 8016.

Hypothesis  :

Hypo1 ) An open below 8048 would put additional pressure on longs and drive the index to 8016 and 7996. We look for signs of aggressive buying near the 7996 zone in Sept F for counter trend trades.

Hypo2 ) a cross of 8081 would setup a short covering move towards 8103 and 8137 again.

BankNifty Sept F :


Background/ Previous Auctions :


Medium Term-

 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 near the open lows which prevailed till the clsoing hour when long liquidation happened.

2) vwap of the day placed at 16227 down from  the 16253 of yesterday

3) Supply still visible near 16300+ but buyers dominate below 16190.

3) Profile closed above  the  3-1-3 distribution of 16105- 16279 range but did not take out previous day’s highs.

Hypothesis  :

Hypo1) An aggressive short comes into place below 16255 for 16210 and 16170 again.

Hypo2 ) above 16340 the BNF maked another attempt to rise towards 16466.