Levels and Plan for 3rd Nov

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 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 which is a reference point and a market which tells us that it does not have new sellers.

Short Term : 

The marked has managed to stay above the longer time frame supply at 7920- 7940 spot . This region is now new support over the short term.  For the coming week Nifty would look to see if sellers are interested in coming back in the auction at 8410 spot. This is the short term traget of the move . Support will be at 8117 during the week

Observations in Today’s session :

(based on Fut prices)

https://www.dropbox.com/s/4g5gs9rqde49cv9/Oct_NF.png?dl=0

#) A trend day which closed at the higher end

#) The market showed buyers at 8232 creating a drive away from Thursday’s value

#) vwap placed at 8313 F

#) Failed auction seen at 7752 F  on 18/10 and is on day T+7. Hence the IPM off 7752 is a strong move as FA point was not visited.

#) For the second day we see buying excess at 8232 to add to the one at 8122 seen on Thursday

#) Pull back low was at 8311 against the pull back low if 8182 seen on Thursday

#) Auction is still creating value higher and buyers are still firmly in control.

Hypothesis  : ( Based on Futures) 

Hypo 1 ) If NF opens above 8350 and crosses 8376 then New longs can be taken for 8444 F with a sl below 8350F.

Hypo2 ) If NF is below 8350 during the morning auction then it will go check for business at 8311- 8314 where the buyer is likely to respond. SL for the short below 8350 will be 8377.

BankNifty NOV F :

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 17680

Short term : .Support for the BN spot is now firmly at 15910- 16000 up from the 15100 spot previous. For the coming week the BN spot would advertise opportunity for sellers around 17121- 17218 spot. Support for the coming week is now at 16700 spot

Observations in Today’s session :

(based on Fut prices)

https://www.dropbox.com/s/r4rbs7x5ci8huw0/Oct_BNF.png?dl=0

#) The BNF trended away from the inside day range and 3 day value.

#)Day type was a trend with open and close at opposite ends

#) vwap of the day was at 17035

#) Pull back low was 17024.

# Buying excess visible at 16856 F and value was created higher.

Hypothesis  : ( Based on Futures) 

Hypo1) If the auction moves above 17187 F at the open then it will still go up to 17296 F where it can meet with some profit booking. Sl for this view above 17187 will be 17080.

Hypo2 )Below 17080 the BNF can drop to 16978 and 16880. Sl for this view will be 17189.