Levels and Plan for 5th 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.

(Update 04/03)

The weekly objective at 9156 fell short by 37 points ( high of 9119) and the Market is close to weekly support of 8856 ( low of 8894 today) . However we believe that the Up auction is over now and the market will drift in a sideways 8844- 8980 kind of range over the coming sessions.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile of today was a gapup however buyers chose to book gains at higher prices.

#) vwap of the day was at 9065 with volume of 154.7 L.

#) Day type was a trend day with Pull back highs of 9104 which is the second resistance below 9191.

#)Price objective of the move above FA point of 9122 F was met however the Market failed to hold above 9122 after the Open

#) Day shows sellers right upto 11.15 but thereafter buyers coming in at lower prices to buy dips.

#) We noted buying at 8930 at the close

#) Scene of the crime was at 9063 F today

#) 9062 is also an anomaly which needs repair

#) Profile for thursday could complete a 2 day DD as long as the lows of 8926F hold

#) In the above possibility the NF can auction upwards t0 9008 F before cooling off again.

#) In the extreme short term any rise to 9062 – 9080 is a short trade with SL above Pull back highs of 9105 for a revisit to test the original buyers of the first  auction at 8810 F.

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#) Anomalies below are at 8881 and 8830

#) 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 8926 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above 8926  then it should move  to 8971 and  9008  Sl for this view will be 8910

Hypo2 ) If NF auctions below 8910 then it should drop to 8855  and below 8855 may drop to 8794 . Sl for this view is 8926

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.

(Update 04/03)

The BN hit 20541 in early trade 43 points short of the expected 20584 levels mentioned above. However the profile closed below 19636 spot in imbalance which would open the possibility of a further drop to 19376 immediately. We will revise when either 19736 or 19376 points out the next auction short term weekly

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The BNF profile met sellers at the open and failed to sustain above 20610-20687 levels ( day high 20740 untradeable)

#) Break of 20250 triggered massive changes in structure and even the previous day buyers at 19960- 19985 were swept away in the down auction.

#) vwap was at 20199 again with volumes of  60L

#)The BNF auctioned below the FA point of 19883F after revisiting it.

#)There were again buying attempts made at 19976 today and if the auction goes to 19970 again the area may be used to sell again.

#) The Objective of the move down below 19970 remains 19521 now.

#) Anomalies in today’s auction are at 19904 and 20112

#) Pull back high of the day is at 20312 which is short term resistance below 20740 now.

#) Path of least resistance in BNF is downwards towards 19521 ( unlike the NF above)

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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 19673 ( K.R.A= key reference area)

Hypo1)  IF BNF auctions above 19673   then it should move to 19800 and 19904   . Sl for this view is 19640

Hypo2) If BNF auctions below  19625   then it can move to 19521   .  Sl for this view is at 19676.