The Market found balance today after the trend day of yesterday and signalled a pause > Directional bias is back to neutral now but ready to proceed on the next leg.
EOD data at the close today showed NF reducing 5656 contracts and BNF reducing 5395 contracts. Bias is not clear for tomorrow. However the contracts added in BNF from the start of the series on this leg up have now come down to 1883 contracts from a high of 13673 contracts ( long liquidation)
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 was consolidating in a broad 100 point range between 8075- 8175 F. This Monday it broke that low and headed down the path of least resistance pointed earlier towards destination trade of 8020 F (achieved) and 7970 F (achieved) Likely to bounce back up from around here.
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) A balanced profile with buyers at lows and sellers at highs and close near vwap
2) vwap of the day was at 7985 down from the 8014 of yesterday
3) Pull back high was at 7995 of trend day dt 16/09 .
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 in 5 days we now have confirmation that the move off 7955 makes that level a support for the near term
Hypo1 ) Profile has to cross 8016 tomorrow for a conservative long play into 8048 and 8058. Sl for this move above 8017 to be kept below 7995.
Hypo2 ) If we break below 7944 tomorrow then NF can reach 7914 and 7892F.
BankNifty Sept F :
Background/ Previous Auctions :
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 chart above shows sellers dominating
2) vwap of the day placed at 15910 down from the 16042 of yesterday
3) Buyers failed at 16130- 16170 on 16/09 creating a sharp move lower
4) Pull back high was at 15981 on 16/09 and would be resistance for a few sessions.
3) Profile closed below the 3-1-3 distribution of 16105- 16279 range .
Hypo1) If BNF trades below 15824 it will fall to 15716 and 15677 . Sl for this view will be 15890.
Hypo2 ) A cross of 16007 would put BNF on course to visit 16130- 16150 again. Sl for this view is 15965.