Levels and Plan for 24th Feb

Medium Term : On Friday May 16th 2014, we saw a  range of 7560- 7125 (spot prices) and we believe it  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).

There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point and support line for the future.

At the end of Dec 2014 we had reason to believe the the long auction in the medium term which started at 5920 early in 2014 may be consolidating for some time. However the Jan auction shows that the move has not terminated yet and we still looking at 10400- 10800 targets through the coming year as long as we stay above 8200 now.

Weekly levels  : 

(first updated 22/02)

(On spot prices)

As we move into expiry week, 8750 holds the vwap for the current settlement and is this 8726- 8750 band remains the  support for the Buyer to hold through the coming few sessions.

Post the late selloff on friday afternoon, a close above 8872 spot will reassure these buyers.

Resistance still at 9035 and 9142/62.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile broke away from value and range of last week and went towards anomaly support

#) The Profile was in imbalance at the close.

#) vwap of the day was at 8826 with volume of 165.2 L.

#) Profile is an incomplete DD with the second distribution unformed between 8726 and 8780

#) High volumes detected at 8778 F which is the immediate hurdle on upsides .

#) Scene of the crime at 8826- 8834 where the dip buyers were forced to retreat in the second wave of selling today

#) The projected imbalance was lower and fell short of the 8726 objective mentioned yesterday

#) Below 8726 long liquidation setup in play for 8643/ 8528

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#) Scene of the crime is at 8958 from 30/01 where the seller first appeared. ON 05/02 we saw aggressive selling happening in the rise from 8830 to 8890 .

#) Profile has an anomaly at 8726 which is new support to keep the trend up. However a revisit at 8726 F is pending.

#) Sellers were seen getting absorbed around 8626- 8644  levels and they will continue as important ref areas in the days to come

#) Profile of 28/01 shows excess at the highs of 9064 which could signal an end to the up auction from 15th Jan.

Hypothesis  :

( Based on Futures) 

K.R.A is 8725 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above  8725 then it will move  to 8778 and 8826 . Sl for this view will be 8711.

Hypo2 ) If NF auctions below  8711 then shorts  should push the auction to 8696  and 8665 F again . Sl for this view to play out fully is at 8729.

BankNifty FEB F :

18400 BN spot will be the key level to watch in BN over the coming weeks on a closing basis. As long as price stays above 18400 weekly closing the BN can make a move to 23500 levels. Highest volume traded in BN in 2014 was at 15100- 15200 spot levels. This 15100 will be the second layer of support in BN below 18400.

Weekly levels :

(first updated 22/02)

(based on spot prices)

We mentioned last week 19385 as decisive in BN for upsides but the BN did not make much headway above it. The week low of 18870 will continue as an important support in the coming few sessions .

The current vwap of BN is at 19280 for the settlement and it matches with the Jan series vwap at the same point. Hence in the current settlement the Put writers will feel emboldened only when this vwap is crossed. A close above 19380 will add to the comfort. Till then the bias will be down wards.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The BNF profile met some late selling which pushed the index below 3 day lows

#) vwap was at 19094  with volumes of 30.5 L

#) profile spiked from 18965 to 18835

#) A move above spike highs is positive else the weakness seen in the index will continue

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#) a buying tail was seen on 10/02 at 18288 and should indicate the end of the down auction from 21130F

#) The profile of 30/01  left behind anomalies at 20560 and 20368 in the Feb F

#) The profile of 03/02 shows anomaly at 19768

#) VPOC of 30/01 placed at 20256.

#) Selling tails seen at 21130 on 28/01

Hypothesis  :

( Based on Futures) 

K.R.A is 18965 ( K.R.A= key reference area)

Hypo1)  IF BNF auctions above  19000  then it will move to 19090 and 19205  . Sl for this view is 18965

Hypo2) If BNF auctions below  18965   then it can move to 18812 and 18555  .  Sl for this view is at 19007