The market showed excess at the highs today in a sudden turn of events abruptly ending the auction from 8370 of last week. Even as it closed above previous bracket highs, we wait for the market to decide if it wants to continue the path of long liquidation seen today ( 234387 contracts closed NF Nov v/s 228523 added in Dec and 16097 closed in BNF nov vs 7696 added in dec) or go test the sellers resolve at 8540F.
Nifty NOV 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) 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.
The short term imbalance objective is at 8560-8580 spot which can be hit by the month end. Support for the coming week is at 8410 and at 8391 spot.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF opened as a drive down and clocked 103 points downside today in a b shaped profile (b shape is long liquidation) #) The failed auction at 8505 on 24/11 met with new sellers and is the first line of resistance now before 8540F #) The auction of the day was a trend day with a close near the lower end of the range #) vwap placed at 8478 #) Pull back low was 8473 for the trend day # Bracket high of 8440- 8460 is new short term support for the index.Imbalance target of 8558-8570 F fell short by 18 points. #) 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.
Hypothesis :
( Based on Futures)
Hypo1 ) If the auction goes below 8433 then NF can fall to 8403 -8392. Sl will be 8451 for this view.
Hypo2 ) If NF auctions above 8483 then new longs can be taken for 8505 and 8540 (tgt 2 only abv 8505 cross . Sl for this view is below 8470.
BankNifty NOV 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.
Short term :
(based on spot prices)
For the coming week the auction has support at 17830 and 17718. Resistance to the upmove will be at 18434.
Observations in Today’s session :
(based on Fut prices)
#) The BNF profile was a trendl day and closed near the lower end # Auction stayed below the FA point of 18135 for the major part of the session #) Failed auction detected at 17565 in on day T+4 now. #) vwap of the day was at 18098 #) Pull back high was 18093 and is res short term #) The second layer of support is at 17964 and finally at 17756. #) Resistance likely to play out at 18368 and at 18524 F #) 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 .
Hypothesis :
( Based on Futures)
Hypo1) If BNF auctions below 18110 then shorts can be taken with sl of 18138 for 18015 and 17941.
Hypo2) IF BNF auctions above 18145 then can ht 18201 and 18270 again. Sl for this view is 18115. |