Levels and Plan for 6th Jan

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 2 timeframe with long liquidation seen at 8480 Plys and sellers coming at 8450 and below

#) Volume was above the weekly average and measured 90 L in Fut

#) vwap of the day was at 8448

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

Hypothesis  :

( Based on Futures) 

K.R.A is 8432 ( K.R.A= key reference area)

Hypo1 ) If NF auctions below 8406  then it will fall to 8358 and 8320. Sl for this view below 8406 is at 8432.

Hypo1 ) If NF auctions below 8433 then it will rise   to 8458 and 8540. Sl for this view is at 8405.

BankNifty JAN F :

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 normal day with a prominent POC at 19165

#) vwap was at 19181

#) excess seen at 18920 on 02/02

Hypothesis  :

( Based on Futures) 

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

Hypo1) If BNF auctions below 19130   then it can move to 19040 and 18940. Sl for this view is at 19185 now.

Hypo2)  IF BNF auctions above 19220  then it will hit 19280 & 19340 again. Sl for this view is 19154.