Another imbalance as the Nifty traded the biggest price decline points wise since the start of the Move at 5100 levels. With an MO of -90 and vix above 16 the next few sessions will stretch both bulls and bears and create large swinging opportunities.
| 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). Until today (16th DEC) the largest drop seen on May 16 th was 432 points and the rally from 5110 was never 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 low of 8052 measures 574 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.
There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point for the future. A drop of 900 points from 8626 will leave us with 7726 just at this reference point.
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 which was a support is now broken and likely to turn into a supply point. As expected the market dropped below 8180 to 7952 today.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF showed initiative selling at the open which was coupled by long liquidation early in the morning.
#) vwap of the day was at 8159
#) Value was again created lower.
#) Pull back high was at 8147
#) 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 above 8147 then it can rise upto 8178. Above 8179 the NF can create a short covering move to 8228.SL for the long view above 8147 will be 8119.
Hypo1 ) If NF auctions below 8099 then it will fall to 8056. Sl for this view is 8121.
BankNifty DEC F :
|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. 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 broke out of the multi day bracket which had a low at 18300.
#) vwap was placed at 18071 today
#) The fall below 18300 was quick and met up with the objectives of the move anticipated in the ST view above.
#) Day type was a trend day which closed at lows
( Based on Futures)
Hypo1) If BNF auctions above 18079 then it can move to 18203 and 18290 to test the supply. Sl for this view s 18030.
Hypo2) IF BNF auctions below 18010 then it will hit 17860 and 17767. Sl for this view is 18130.