Today’s OrderFlow at the lows was a repair of tuesday’s auction and can hold the market up well in the coming sessions.
.EOD data gave us 22530 contracts covered in Open Interest in NF and BNF. We prefer to look at them as shorts covered at lows rather than long liquidation in an uptrend based on OrderFlow data.
Nifty Sept F
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 430 points .
Targets for the Upmove remain 7900 spot (achieved) and 8300/ 8581 in the medium term. Support at 7500/ 7100 spot.
Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015
Short term :
Today was evidence that step 2 of the Steidlmayer distribution discussed here is Over and the Markets head back to Imbalance. In such a scenario the first imbalance target of the new move will be 8104-8124 (achieved on 02sept) Target 2 of the Steidlmayer Imbalance off expiry week is at 8232.
On the Monthly Time frame we see September Nifty having supports at 7835 and 7706 on spot levels and targets of 8068 spot (done) and 8226 spot.
Support for the current week has moved upto 8110 from the 8062 F given earlier yesterday.
Observations in Today’s session :
1) OrderFlow shows sellers liquidating positions today
2) vwap of the day was at 8125 down from 8140 yesterday. Hypo1 fell short by 5 points .
3) Day type was a neutral extreme day with close at Buyer’s extreme.
4) Failed auction noted at 7955 on 27/08 is on day T+5 now
5) Single prints noted at 8016 would indicate a new support base near 8016.
Hypo1 ) As in a neutral extreme an open above 8140 tomorrow continues the imabalance for a price probe to 8174 again. Above 8174 we should see the NF go to 8193.
Hypo2 ) If we stay up below 8136 tomorrow then the NF would fall to 8123 and 8110 again.
BankNifty Sept F :
Background/ Previous Auctions :
Friday May16th 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 :
On the Monthly time frame support for Sept BankNifty is at 15580 spot followed by 15200- 15100 mentioned above. First target would be 16335 followed by 16795.
Thursday Observations :
1) The BNF auctioned below VAL mostly today.
2) vwap of the day placed at 16074 down from the 16174 of yesterday
3) Pull Back low from 01/09 was at 16004 and held the market up in today’s session.
Hypo1) An open above 16130 in the session tomorrow would mean that BNF trades to 16210 and 16250 again. Sl for this view is below 16105.
Hypo2 ) Below 16073 the downtrend asserts it self again and BNF can visit 16006 and 15953.