Levels and Plan for 18th Nov

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)  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 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. There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point for the future..

Short Term : 

(On spot prices)

The marked 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 has excess now and is also a higher support for the index. Resistance likely to play out first near 8438 (High on 17/11)  and if crossed near 8544-8580 spot.Support for the index in the coming week will be at 8361 and 8323.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF closed above  the bracket high of 8417 even as short term charts tagged the 8438 resistance level on the spot.

#) The profile chart shows anomalies above 8408 to 8448 F

#) The auction of today went below spike lows to look for new business but was met with strong responsive buying

#) vwap placed at 8405 today

#) The imbalance off 8417 has targets of 8492 and 8558 as long as support near 8370 is held.

#) The range of the Move seems to be settling down now between 8260- 8514 F. Cmp 8452 NF

#) Failed auction seen at 7752 F  on 18/10. Hence the IPM off 7752 is a strong move as FA point was not visited.

#) We see buying excess at 8232 on 31/10 and at  8122 seen on 30/11. Both these points are supports for the short term trader.

#) Pull back low was at 8311 against the pull back low if 8182 seen on 30/10

#) Auction is now past the IPM stage and onto Step2 of the SteidlMayer distribution model and looking to head into step3 and a new IPM

Hypothesis  : ( Based on Futures) 

Hypo1  ) If NF auctions below 8464 in the IB tomorrow then it will move down to retest 8431 and possibly 8416 again. This view can be traded with a 10 point stop.

Hypo2 ) If the auction is above 8470 then the imbalance target is 8492/ 8512 and finally 8558

BankNifty NOV F :

Short term :

(based on spot prices)

For the coming week the auction has support at 17430 and at 17244 if 17430 gets broken down. Resistance to the upmove will be the same 17651. However a cross of 17651 can invite a higher target of 18067 spot before the Month runs out.

Observations in Today’s session :

(based on Fut prices)

#) The BNF again saw buyers coming in strongly near 17540 and pushed the index higher into the close

#) The aggressive seller at 17735 is partially neutralised and new lngs came back in the index today.

#) The day closed above the previous reference area of 17735 F

#) vwap of the day was at 17621

# 17540 is now intra day support and 17788 would be resistance.The imbalance move has targets of 17954 this week if 17540 is held .

#) Pull back low was 17024 on 31/10 and found new buyers there on 3/11 . 17024- 17040 is now a huge support for the BNF.

# Buying excess visible at 16856 F on 31/10 and value was created higher.

Hypothesis  : ( Based on Futures) 

Hypo1) IF BNF auctions above 17788 then new longs can be taken for 17954 with stops below 17720.

Hypo2) If BNF auctions below 17735 then it can rotate lower to 17681 and 17620 . Sl for this view is 17788.