Levels and Plan for 18th March

Medium Term : On Friday May 16th 2014, we saw a  range of 7560- 7125 (spot prices) and we believe it  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).There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point and support line for the future.

At the end of Dec 2014 we had reason to believe the the long auction in the medium term which started at 5920 early in 2014 may be consolidating for some time. However the Jan auction of 2015 shows that the move has not terminated yet and we are still looking at 10400- 10800 targets through the coming year as long as we stay above 8200 now.

On the Monthly scale we are tracking 8750 as pivot through March. The Objectives of the run up are at 9036 then 9156 and finally 9280.

(Update 08/03/15)

Post the RBI surprise the Nifty attempted 9119 just short of the 9156 estimate but failed to sustain above 9036 in the closing hour. The long liquidation which followed changed the short extreme short term and the market will have to dip lower to meet new buyers.

(Update 15/03/15)

The Market closed below the Feb series vwap of 8750 on the weekly. This means the path of least resistance now for the market is to 8473 spot which is the Jan series vwap.

Weekly levels  : 

(first updated 15/03)

(On spot prices)

For the coming week supply should be seen at 8720- 8740 with a possibility of further long liquidations in the Nifty at these levels. Now 8820 spot will keep the bear interested all through this series and is the higher supply point 2 for the week. Only a close above 8820 spot can force shorts out for this series.

Immediate support below for the index is at 8572 spot and below that the drop should be contained at 8464 spot.

Around the 8572 spot the Nifty would have corrected around 525 points which should equal the drop from 8995 to 8470 whose magnitude was 525. The drop from 9119 will achieve parity at 8594.

(Update 17/03) 

The high of today’s trade was 8742 and EOD data showed more long liquidation in NF and BNF. We are moving resistance down from 8820 to 8787 as the Min levels for the Bulls to cross to get a toe hold again in the series.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was 2 time frame neutral day which closed at the highs

#) The neutral day suggests two time frame activity dominated by both Buyers and Sellers again after the one time frame move of Friday

#) vwap of the day was at 8704 with volume of 151.6 L.

#) Day shows heavy volume buy at 8716 who will be called to defend the fall if any from 8750.

#) Resistance above remains the seller of 13/03 at 8785- 8802.

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#) Heavy selling volumes were seen at 8806/ 8786 on 13/03

#) Day Profile of 09/03 shows excess from 8866 to 8920 F

#) Excess seen at 8873 to 8832 on 13/03.

#) Scene of the crime was at 9063 F  on 05/03.

#) Scene of the crime was at 8832 F  on 13/03.

#) 9062 is also an anomaly which needs repair

Hypothesis  :

( Based on Futures) 

K.R.A is 8747  ( K.R.A= key reference area)

Hypo1 ) If NF auctions above  8747  then longs can be taken for 8785 and 8802 . An upmove above 8802 can bring 8856.  Sl for this view is 8717.

Hypo2 ) If NF auctions below  8715   then it should move to 8694 and 8650 . Sl for this view is 8735.

BankNifty Mar F :

 Medium Term-  18400 BN spot will be the key level to watch in BN over the coming weeks on a closing basis. As long as price stays above 18400 weekly closing the BN can make a move to 23500 levels. Highest volume traded in BN in 2014 was at 15100- 15200 spot levels. This 15100 will be the second layer of support in BN below 18400.

Weekly levels :

(first updated 15/03)

(based on spot prices)

The BN has support at 18500 which is near the lows of the FEB expiry. As noted above we maintain this 18400- 18500 spot zone as huge support for the index. The Last bounce off this point at the start of the series measured approximately 2000 points.

Supply for the coming week is at 18950- 19000 . This is the point at which the 19000 pe writers need to be watched. However the BN would be clear for long ideas only above 19390 spot now for this series.

Below 18435 spot, there should be fast drops to 18200/18146 to begin with and much lower post that. We will update values if we get there.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The BNF profile was 2 time frame neutral extreme with close at higher end

#) vwap was at 19019 with volumes of  41.5 L

#) Profile closed above yesterday’s highs and could target 19334 on imbalance.

#) Above 19215 is a quick move to 19334 and 19377 .

#) Profile finished again as a neutral extreme .

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#) Big volume selling seen on 13/03 again at 19404, 19032 and 18972 below

#) Day high was seen at 19444 on 13/03 just below the huge sell order discussed below of 19496

#) Excess seen at 19444 t0 19374 on 13/03 reconfirming the previous sellers in this zone

#) Break of 20250 triggered massive changes in structure and even the previous day buyers at 19960- 19985 were swept away in the down auction. of 04/03.

#) Pull back high of the day profile of 5th March is at  20312 which is short term resistance below 20740 now.

#) The Previous FA point in BNF is at  19883F .

#) Anomalies in the  auction of 04/03  is at  20112

#) Big Volume aggressive Sellers seen at 19576 , 19496 and 19376 in the afternoon of 09/03.

Hypothesis  :

( Based on Futures) 

K.R.A is 19200 ( K.R.A= key reference area)

Hypo1)  IF BNF auctions above 19200   then it should move to 19300 and 19334 to 19374 .   . Sl for this view is 19080

Hypo2) If BNF auctions below   19080   then it can move to 18998 and 18900  .  Sl for this view is at 19170.