The first day of the month in a holiday shortened week had poor volumes even as the market consolidated the gains from the recent run -up
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Nifty NOV 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 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 at 7723 which is a reference point for the future.. Short Term : The marked has managed to stay above the longer time frame supply at 7920- 7940 spot . This region is also 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 target of the move . Support will be at 8188/ 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 normal distribution day ( very rare day type) #) The market had locals trading the few points either side of vwap #) vwap placed at 8362 #) 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. #) We see buying excess at 8232 on 31/10 and at 8122 seen on 30/11. Both these points are supports for the short term trader. #) Pull back low was at 8311 against the pull back low if 8182 seen on 30/10 #) Auction is still creating value higher and buyers are in control and holding up the profits ( No long liquidation visible yet) Hypothesis : ( Based on Futures) Hypo 1 ) If NF opens below 8362 then it will test the 8346 level again and if 8346 does not hold it will go to pull back low of 8311 / 8304. SL for this move below 8362 will be 8387. Hypo2 ) If NF actions above 8388 then the auction can play out to 8430 and 8444 mentioned in the previous posts. Sl for this move will be 8361. BankNifty NOV 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 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 showed some profit booking near the open but responsive buying emerged at the previous VPOC of 17050. #)Day type was a normal variation with a partial range extension. #) vwap of the day was at 17187 #) Pull back low was 17024 on 31/10 and found new buyers there on 3/11 . 17024- 17040 is now a hge support for the BNF. # Buying excess visible at 16856 F on 31/10 and value was created higher. Hypothesis : ( Based on Futures) Hypo1) The BNF may consolidate in a 17300F – 17030 kind of range. Idea would be to sell closer to 17290 with a 50 point stop for 17200 or buy closer to 17050 with a 50 point stop for 17120/ 17200. Hypo2) If BNF manages to cross 17300 then the imabalance target of the move will be 17530/ 17582 |