Another Neutral day in the markets and an exact repeat of Tuesday’s auction as the dip did not get new sellers and the market closed at day highs.
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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 #) A neutral extreme day which closed at the higher end #) The market did not find new selling as it probed the region of yesterday’s highs near 8052. #) vwap placed at 8073F #) Failed auction seen at 7752 F on 18/10 and is on day T+6 #) The inside day break of yesterday gave 38 points but fell short of the 8111 objective. Hypothesis : ( Based on Futures) Hypo 1 ) If NF auctions above 8113 then new longs will target 8170 F and sl for this view will be 8080. 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 trend day lower with an Open rejection and excess visible at 16784 #) Today’s Profile shows sellers defending 16700 supply again. #) vwap of the day was at 16659 3)Day type was a normal variation day which had a successful range extension below. Hypothesis : ( Based on Futures) Hypo1) If the auction below 16600 then BNF can fall to 16502 and 16395. Hypo2 )Above 16725 the BNF can revisit the excess of today at 16784 and go on to 16824. |