A gap up took the indices higher today but we saw more of the same OrderFlow as Friday with the Nifty F still persisting with the short buildups and the BankNifty showing huge long futures added.
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Nifty OCT F |
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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 : Longer time frame supply rests at 7920- 7940 spot. Above these levels a fierce short covering move can come to 7995/ 8040/ 8082. Support placed at 7841 spot now. Observations in Today’s session : https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0 1) A two time frame auction which showed sellers at higher levels and buyers at the lows. 2) Today’s chart shows sellers at 7923 and lower at 7908 but there were no new sellers as the market dipped lower to 7882. 3) Profle formed a normal distribution curve and created value higher , the first after many sessions. 4) Failed auction seen at 7752 F on 18/10 and is on day T+1 4) Day type was a normal variation with a vwap and dpoc placed at 7909. Hypothesis : Hypo ) The NF profile is delicately placed for a short covering run if it trades above 7942 tomorrow in which case new longs can be taken with stops below 7909 for 7998/ 8056F. Hypo2 ) If NF auctions below 7882 then it will go for gap fill at 7857 and move lower to 7824 if buyers are not seen at 7857. BankNifty Oct F : |
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| 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 : . BN resistance now would be at 16463 spot which is the imbalance measured target of the move away from 16000 spot. Support now for this index is again at 15800 spot as before.
Observations in Today’s session :
https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0 1) The profile in the BNF was a 2 time frame normal distribution curve wth sellers above and buyers below 2) Profile shows sellers operating between 16280- 16230. 3) vwap of the day was at 16263 F 4) Day type was a normal variation with a close just around vwap. Hypothesis : Hypo1) If we auction above 16355 then BNF can move towards 16456 and 16516. These longs would have stops just below 16300. Hypo2 ) Below 16252 the sell side pressure increases and BNF can dop to 16147 and go to 16027 . |