Levels and Plan for 5th Jan

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).

Until the 16th of DEC  the largest drop was about 450 points for the entire rally from 5110 levels. The drop seen on May 16 th was 432 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. Conversely the Nifty had run up straight 2 times for 936 and 925 points . The upmove from 7723 to 8626 measured 903 points. The drop from 8626 to the  low made on 17/12 of 7961 measures 665 points and violates the 450 points done previously. In such a case the market should drop by an extra 450 points and round off the correction by dropping a total of 900 pints.

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

Weekly levels  : 

(On spot prices)

The Nifty has managed to stay above the  7920- 7940 spot during the last 665 point drop . This region is also now new support over the short term.

In the coming week 8320 spot and 8290 spot are 2 support bands for the index. Resistance will be seen again at 8399 and if crossed then at 8452.  A 50 point move above 8452 should bring 8504 and possibly 8548 from where the market began to show long liquidation last month on 8th Dec. A close below 8320 spot would mean 8242 spot levels during the week.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was trend day which closed at session highs

#) Volume was above the weekly average and measured 96 L in Fut

#) vwap of the day was at 8439

#) Pull back low was a 8433 making 8433-8439F an important support for Monday

#) Buying excess seen at 8358 F on 2/01

#) Imbalance objective of the move remains 8510 F.

Hypothesis  :

( Based on Futures) 

K.R.A is 8418 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above 8430  then it move again to 8470 and 8510. Dips to 8430 F are buys with sl of 8418 for 8470/ 8510.

Hypo1 ) If NF auctions below 8418 then it will drop  to 8391 and 8353. Sl for this view below 8418 is at 8437.

BankNifty JAN F :

Medium Term-  

18450 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 18450 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 18450.

Weekly levels :

(based on spot prices)

In the coming week 18723 and 18610 are 2 support bands for the index. Resistance likely to play out near 19300 spot. dips upto 18920- 18865 will be seen as buying opportunities in the index.

Observations in Today’s session :

(based on Fut prices)

#) The BNF was a trend day which closed near the session highs

#) vwap was at 19168

#) Pull back low of the day was at 19163.

#) 19163- 19168 are important supports for Mon

#) excess seen at 18920 on 02/02

#) Imbalance objective of the move is at 19344.

Hypothesis  :

( Based on Futures) 

K.R.A is 19160 ( K.R.A= key reference area)

Hypo1) If BNF auctions above 19170   then it can move to 19270 nd 19340. Sl for this view is at 19135 now.

Hypo2)  IF BNF auctions below 19130  then it will hit 19080 & 19040 again. Sl for this view is 19184.