At the close of a low volume session last Wednesday the market was primed for a big move but reading order flow in a low volume market was always going to be tricky with a holiday season coming up. We look forward to the initial balance in the first session of Tuesday.
Nifty OCT 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 as long as 7900 spot holds (+/- deviation of 50) are 8300/ 8581 in the medium term. Support at 7900/ 7500 spot.
Our Profile studies indicate 11600 as a long term target on the Nifty in 2016-17 provided 6300 holds through 2015
Observations in wednesday’s session :
1) A neutral day with both buyers and sellers and a close in favor of sellers.
2) vwap of the day was at 7989
3) OrderFlow chart above shows sellers entering in last 30 minutes of the trade.
4) Data also shows liquidation in the 8010- 8015 zone of day longs
5) 8020- 8056 remains a poorly auctioned zone
6) Profile was imbalanced towards the downside at the close
Hypo1 ) An auction below 7970 tomorrow and a break of the 7956 support would mean NF at 7927/ 7902 again where Orderflow needs to be seen for buyers coming back again as earlier
Hypo2 )Above 8016 longs can be taken to 8036 and a possible 8059 with stops below 7997.
BankNifty Oct F :
|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
Observations in Wednesday’s session :
1) The profile in the BNF was balanced today and rotational in a 125 point range
2) The Sellers were seen operating near 15410 on wed to add to those at 15660 again
5) day type was normal
Hypo1) If we stay below 15350 at the Open then BNF can move to support at 15227- 15240. Below 15227 it can drop fast to 15101.
Hypo2 ) Above 15410 it will move towards the seller at 15480 and a move above that will bring 15600 .