Levels and Plan for 20/11

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   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)

#) Temp rejection of 8460 VAH was confirmed by the marked staying below VAL all day today.

#) The profile chart shows anomalies being repaired from 17/11

#) The auction of today was a double distribution with 8430 as pivot and ref area for tomorrow as well.

#) vwap placed at 8428 today

#) The range of the Move has settled down  now between 8260- 8514 F. Cmp 8409 NF

# Day type was a DD today ( B shaped structure)

#) 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 above 8408 then it would attempt a visit at 8430.A cross of 8433 would put NF at 8470 . Sl for this view is 8392.

Hypo2 ) If the auction is below 8408 then NF can go down to 8386 and 8355. SL for this view is 8418

BankNifty NOV F :

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 long target of 17680 has been met.

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 profile was balanced and a gaussian curve

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

#) vwap of the day was at 17677

# 17540 is now intra day support and 17788 would be resistance.

#) 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 below 17637 then it should revisit 17540 and possibly 17499. Sl for this view is 17697.

Hypo2) If BNF auctions above 17705 then it will move upto 17750 and 17788 again. SL for this view is 17670/