USDINR at 62 and a vix near 16.70 with global markets in turmoil and swinging wildly would tell us that the current phase of the market is not “normal” by any standards and caution advised on long as well as short side. We urge you to stay nimble and don’t be rigid with your view. These markets are known to hurt rigid views the most.
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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 trend day structure which balanced off early morning before spinning wildly lower from 7868. 7868 is the proverbial “scene of the crime” 2) Today’s chart shows buyers between 7878 and 7905 who liquidated below 7869 . Small buying seen at 7767/ 7761. 3) Day shows a prominent POC at 7877 as the market spiked lower into the close in an incomplete auction. 4) The market finished in a spike and hence an open above spike lows would mean a test of the entire spike region starting with 7761 to 7855 4) The 3-1-3 profile mentioned broke down to give a trending move and reach the hypo1 target 100 points lower. Hypothesis : Hypo ) An open above 7761 would mean that we auction the drop zone and first target of the move would be 7807 followed by 7830 and then 7855. If this view plays out fully tomorrow then we can expect a weekly close at 7865 tomorrow. Hypo2 ) If NF gets rejected at 7807- 7817 on any bounce then we can go down to 7761 and 7705 to complete the week . 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 trend structure with sellers coming in strongly between 15750 and 15840 2) Buyers were seen trying to defend first at 15640 and then lower near 15540 but were unable to make much impact. 3) Profile finished in a spike which is an incomplete auction Hypothesis : Hypo1) If we stay above spike lows of 15500 then BNF will go to 15617 and a cross of 15617 will bring 15730 again where the seller can respond again. Hypo2 ) Below 15500 F tom the BNF will go down easily to 15340 the current week’s lows. |