Levels and Plan for 4th March

Medium Term : On Friday May 16th 2014, we saw a  range of 7560- 7125 (spot prices) and we believe it  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).

There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point and support line for the future.

At the end of Dec 2014 we had reason to believe the the long auction in the medium term which started at 5920 early in 2014 may be consolidating for some time. However the Jan auction shows that the move has not terminated yet and we are still looking at 10400- 10800 targets through the coming year as long as we stay above 8200 now.

On the Monthly scale we are tracking 8750 as support through March. The Objectives of the run up are at 9036 then 9156 and finally 9280. Since the market is swinging up in 900 point increments the run off above 8668 can target 9568 at a later date.

Weekly levels  : 

(first updated 01/03)

(On spot prices)

For the holiday shortened first week of March the support on any declines will be at 8856 and  8798 during the week.  However there would be visible loss of momentum if 8856 breaks for any reason. Strategy is to buy dips till 8856 holds.

Resistances and price objectives for the dip buyers above are at 9036 and 9156 during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile saw a revisit of the failed auction at 9033 and auctioned higher into the close

#) vwap of the day was at 9017 with volume of 108.87 L.

#)Price objective of the move above FA point is at 9122 F

#) Day saw buyers at 8990 and 9028-9036 and the biggest of the day at 9048F.

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#) We believe the Profile will still probe a bit higher before creating a balance between 8950- 9150 F through most of March

#) Failed auction noted at 8752 on 27/02

#) High volume buying seen between 8810- 8888 during the session dated 28th Feb and dips to 8870/80 should be seeing a cushion of support here

Hypothesis  :

( Based on Futures) 

K.R.A is 9058 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above  9058  then it should move  to 9090  immediately  and above 9090 the imbalance objective is 9122 F . Sl for this view will be 9034

Hypo2 ) If NF auctions below 9034 then it should drop to 9006  and below 9006 may drop to 8978/8944 . Sl for this view is 9058

BankNifty Mar F :

18400 BN spot will be the key level to watch in BN over the coming weeks on a closing basis. As long as price stays above 18400 weekly closing the BN can make a move to 23500 levels. Highest volume traded in BN in 2014 was at 15100- 15200 spot levels. This 15100 will be the second layer of support in BN below 18400.

Weekly levels :

(first updated 01/03)

(based on spot prices)

Last week the expected short covering happened above series vwap of 19204- 19277 and the BN trended higher to close the week.

In the coming week 19970 is the resistance but all declines to 19300 should be used to build long positions as shorts of Jan and Feb begin to cover.

Levels wise we expect 19377 spot to be a key support in coming week.There is also an easy 200 point long trade above 19784 to 19970.

( Update 02/03)

The BN profile closed above the resistance pointed at 19970. We are now tracking the Move of the BN through the profile of 30/01 where the shorts first appeared in BN from 20584 spot levels. We believe now that BN will retrace this entire profile upto 20584 levels as long as it stays above 19736 spot. For this view to play out better the BN should not drop below 20000 levels.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The BNF profile showed strong buyers at 19960- 19985 today

#) vwap was at 20069 again with volumes of 28.5 L

#)Profile was an Inside day and a 2 way auction.

#) Profile can travel to 20607 if 20250 is crossed now.

#) Profile shows a Failed Auction at 19883 F on 02/03 which is the support for longs going forward.

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#) Profile shows strong buying coming between 19480 and 19680 which should cushion any falls in coming sessions

#) Anomaly at 19592 and 19520  needs a visit and repair

Hypothesis  :

( Based on Futures) 

K.R.A is 20064 ( K.R.A= key reference area)

Hypo1)  IF BNF auctions above  20064  then it should move to 20199  and above 20255 the imbalance is to 20443/20496  . Sl for this view is 20010

Hypo2) If BNF auctions below  19955   then it can move to 19884 and below 19884 the move is to 19714/19768  .  Sl for this view is at 20066.