Levels and Plan for 20th Oct

A combination of local and international factors will ensure a high volume open at the Opening bell tomorrow. On friday the Nifty and the BankNifty finished mixed, with the Bank Nifty showing a trend day and positive order flow and the Nifty a neutral center and negative orderflow from the highs.

Nifty OCT  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 450 points .

In the current context the drop from the Nifty spot high of 8180 to the recent low of 7723 made on 17/10 equals 457 points. There was a failed auction noted at the lows on 17/10 which is a reference point and a market which tells us that it does not have new sellers.

Short Term : 

Supports are at 7723 and at -7764 spot. Resistance to the upmove now at 7830 and 7888 spot.

Longer time frame supply rests at 7920- 7940 spot. Above these levels a fierce short covering move can come to 7995/ 8040/ 8082.

Observations in Today’s session :


1) A two time frame auction which visisted the area of the sell off on thursday and came down on selling pressure

2) Today’s chart shows buyers between 7776 and 7797 who propelled the market higher only to meet sellers at levels above 7842.

3) Spike range of the previous session was auctioned fully between 7761 and 7855 as pointed in the previous post.

4) Failed auction seen at 7752 F .

4) Day type was a neutral center with an FA at 7752 and responsive selling at 7855. Day vwap was 7804.

Hypothesis  :

Hypo ) An open above neutral center vwap of 7804 would confirm a long bias above 7824 and would mean that 7857 would get visited. Longs can be taken either at 7804 or above 7824 with stops below 7791 for 7857. A move above 7873 would bring 7930 easily.

Hypo2 ) If NF opens below 7804 and support at 7790 fails then can visit the FA at 7752 F and fall to 7705F.

BankNifty Oct 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. 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 : Support in BN would be now at 15510 spot ahead of the 15100.Resistance in BN is now placed just above 16010 spot .


Observations in Today’s session :



1) The profile in the BNF was a trend structure with buyers coming in at 15730 and overcoming the supply at 15870 F

2) Open was a rejection of the spike pointed out on thursday which took the BN lower

3) vwap of the day was at 15847 F

Hypothesis  :

Hypo1) If we open above trend day high of 16032 then BNF would run into res near 161158 which is the imbalance target of the move.

Hypo2 ) Below 16030 F the BNF can come down to 15900 again and if buyers do not show up near 15870 then BNf can drop 100 points to 15775.