Long Interest came back in the market today as both NF and BNF covered ground above the pull back high but stopped exactly at last week’s highs in Nov F. 188687 got added in next month whereas near month reduced 145197. In BN it was 8067 v/s 4714 contracts reduced.
| 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 held yesterday lows and crossed pull back highs in afternoon session thus establishing control of buyers. #) 8505 was visited but new buying volumes were not present abv 8505. #) The auction of the day finished near vwap placed at 8471 #) 2 attempts above 8505 met with resistance at last week’s highs of 8512. # 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 above 8491 then NF will reattempt 8512. Above 8514 the traget of the move is 8539. Sl for the first case is 8469 and 8499 for the move abv 8512.
Hypo2 ) If NF auctions below 8468 then it will revisit 8443/ 8437. sl for this view is 8492.
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 tested hypo2 objective of the day below 17940 but failed to get new sellers interested. # Auction could not stay above the FA point of 18135 . #) Failed auction detected at 17565 in on day T+5 now. #) vwap of the day was at 18003 #) 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 18000 then shorts can be taken with sl of 18041 for 17941 and 17905
Hypo2) IF BNF auctions above 18076 then it can go once more to 18135. sl for this view is 18035. |