We went back to imbalance today on the upper side as extremely oversold conditions painted by the MO at -93 yesterday created a relief rally for the bulls today. Value was established higher by the close and we auctioned above VAH all day.
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 the 16th of 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 the low made on 17/12 of 7961 measures 665 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.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF showed initiative selling at the open but responsive buyers stepped up post IB for the second straight day #) Value was created higher after many sessions #) day type was a neutral extreme dominated by buyers at the close. #) Pull back high was at 8147 on 16/12 initially stopped the market’s progress in the morning but we saw huge volumes come here in afternoon session #) 8147 is now a support for the short term. #) Anomalies on any upmove are at 8444 and at 8552 . #) 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.
Hypothesis :
( Based on Futures)
Hypo1 ) If NF auctions above 8197 then it can rise upto 8233 and above 8233 may finish the week at 8288 .SL for the long view will be 8174.
Hypo1 ) If NF auctions below 8166 then it will fall to 8139. Sl for this view is 8189.
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 was confined to a 18580- 18200 kind of range even as Nifty auctioned down. When the support at 18200 gave way during the week, the BN can lost 400 points quickly.The 18200 zone is now supply. The regions around 17680- 17750 have 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 down early in the IB but was met with responsive buying who took the index back above VAH #) Day type was a neutral extreme and a close at session highs. #) The fall below 18300 has been quickly retraced and the BNF is back up for 18670 F in a session or 2.
Hypothesis :
( Based on Futures)
Hypo1) If BNF auctions above 18420 then it can move to 18559 and 18692. Sl for this view is at 18330 now.
Hypo2) IF BNF auctions below 18255 then it will hit 18150 again. Sl for this view is 18310. |