Yesterday’s shorts gave up today in the Nifty creating a short covering move in the second part of the session even as traders adjusted exposure to the twin issues of the FED outcome and the October expiry scheduled on thursday
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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 : The marked finished a full session above the longer time frame supply at 7920- 7940 spot last wed. Support now placed at 7920 spot this week.Below 7920 the market can once again drop a 100 points to 7827 quickly. 8060 spot is now short term resistance. Observations in Today’s session : (based on Fut prices) https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0 #) Adouble distribution day with an auction below 8030 in the first part and above 8030 in the second half. #) The market did not find new selling below 8004 resulting in an FA at 8003 today #) yesterday’s sellers from 8030-35 were seen liquidating positions around 8010. #) vwap placed at 8025 again for the day , the same as yesterday #) Failed auction seen at 7752 F on 18/10 and is on day T+5 #) Day type was a normal variation type with a close near the highs. Day type was also inside . #) The normal day seen on 22/10 has now created 2 value areas just above but adjacent to each other wanting to probe higher. Hypothesis : ( Based on Futures) Hypo 1 ) If NF auctions above 8053 then longs can be initiated with stops below 8020 for 8082 and 8111. Hypo2 ) Below 8050 the NF will drop again to 8022 and can visit the FA at 8003 below that. 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 17680Short term : .
Support for the BN spot is now at 16300 spot this week followed by 16128. Resistance to the upside would be 16560 and 16720 this week.
Observations in Today’s session : (based on Fut prices)
https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0 #) A normal day with value created slightly higher #) Today’s Profile shows buyers coming strongly into the close to overcome the supply near 16700- 16710. #) vwap of the day was at 16674 3)Day type was a normal distribution curve which showed inclination to break on the upper side. Hypothesis : ( Based on Futures) Hypo1) If the auction stays above 16720 then BNF can go to 16820 and 16930. Sl for this view will be 16660. Hypo2 )Below 16640 the BNF can drop to 16580. |