Levels and Plan for 9th Jan

On Friday May 16th we saw a  range of 7560- 7125 (spot prices) and we believe it  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.This would put the correction target at 7726.

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 move of 6th Jan broke through the support band of 8320 spot- 8290 sand collapsed to 8111 levels. The imbalance objective of the move was 8122 spot and the Nifty closed around this objective twice in succession  after putting in a firm bounce from 8065. This region should provide a bounce for the rest of the week and the quality of the bounce may produce the next round of selling. Remember the medium term  objective is still at 7723 spot levels for the correction as stated above.

Observations in Today’s/ Previous  sessions :

(based on Fut prices)

#) The NF profile was a double distribution after a gap up

#) Volume was 102 L today

#) The profile above shows a complete distribution between 8236 and 8194 and an incomplete one between 8247- 8274

#) The incomplete nature of the second auction opens the possibility of a revisit to this zone even if we move away at open away from the range

#) vwap of the day was at 8228 well below yesterday’s 8147

#) Buying excess seen at 8358 F on 2/01 was replaced by selling excess from 8422 which negated the multi day value created from 29/12.

#) Pull back high of the move of 06/01 is at 8257- 8268 showed sellers/ long liquidation coming again today

Hypothesis  :

( Based on Futures) 

K.R.A is 8282 ( K.R.A= key reference area)

Hypo1 ) If NF auctions above 8282  then it will move  to 8330 and if 8358  Sl for this view will be 8267

Hypo1 ) If NF auctions below 8271 then it will fall  to 8248 and 8223 . Sl for this view is at 8282.

BankNifty JAN F :

 Medium Term-  

18400 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 18400 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 18400.

Weekly levels :

(based on spot prices)

The BN collapsed below the support band of 18723 – 18610 today and fell to 18388.  We have mentioned the importance of 18400 spot for the weekly trend up in BN above. The objective of the imbalance was seen at 18440 and the BN closed around there. The 18200 zone is new support below 18400 spot.. However if 18200 spot gets broken then BN can witness a bigger fall to 17820 region .

Observations in Today’s session :

(based on Fut prices)

#) The BNF was in a double distribution and like the NF the upper distribution was incomplete

#) vwap was at 18670 against the  18436 of yesterday

#) excess seen at 18920 on 02/01 was taken out by excess at 19024 on 6/1

#) Pull back high seen at 18817 on 6th Jan was revisited today

#) The imbalance objective is still at 18912-18960 F

Hypothesis  :

( Based on Futures) 

K.R.A is 18800( K.R.A= key reference area)

Hypo1) If BNF auctions above 18810   then it can move to 18915 and 18968. Sl for this view is at 18765 now.

Hypo2)  IF BNF auctions below 18746  then it will hit 18670 & 18570. Sl for this view is 18810.