Friday’s session was wild but functioned within the parameters known already- that of supply being present above 8140 and good buyers buying near 8075/ 8088.
EOD data at the close on Friday showed that the broader market was not carrying the quantity of longs it had in the Nifty on Monday morning (1st day of the series) and there was long liquidation in the Bank Nifty for the second straight day.
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 :
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 8300 spot.
The Market is consolidating in a broad 100 point range between 8075- 8175 and once this consolidation is over the Sept F should go to 8330 F and 8487 F during the current series. On the lower side the NF should find support at 7860- 7900 during the series on any big downturns.
On the weekly TF the Sept F has support for the coming week at 8071 and 8041 and resistance at 8228/ 8280 and 8338 in that order.
Observations in Today’s session :
1) OrderFlow shows buyers absorbing the selling at 8071- 8085.
2) vwap of the day was at 8114 down from 8125 yesterday.
3) Day type was a normal variation day with close at vwap
3a) Small excess noted at 8074 indicating the market’s unacceptance of the price probe below 8085.
4) Failed auction noted at 7955 on 27/08 is on day T+6 now. Since it was not visited we now have confirmation that the move off 7955 is a stronger IPM than originally thought and the market makes 7955 a bigger support.
5) Single prints noted at 8016 on 01/09 would indicate a new support base near 8016.
Hypo1 )We watch OrderFlow at 8120- 8123 at the open and if the market shows aggressive buyers in that range then NF will attempt 8150 and 8173 from there with stops below 8095,
Hypo2 ) Below 8095 the NF will weaken and go test the buyers at 8074- 8063.
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 15875 spot followed by 15580. First target would be 16335 spot followed by 16605 spot
On the weekly TF the BNF has support at 15960 and 15801 during the week. Resistances would be at 16409 and 16561 during the coming week
Thursday Observations :
1) The BNF showed sellers getting active below 16110 today but buyers responding near 15980.
2) vwap of the day placed at 16060 about the same as the 16074 of yesterday
3) failure to auction above 16100 is inviting long liquidation in BankNifty Sept F
Hypo1) An open above 16115 in the session tomorrow would mean that BNF trades to 16175 and 16250 again. Sl for this view is below 16085.
Hypo2 ) The BNF will be weak below 16080 again and look to move towards 15953 again. Below 15953 there will be a bigger and faster fall to 15801.