Ahead of the big event on thursday the sell off in the closing hour caught market participants by surprise and planted doubts in the minds of rampaging bulls
Nifty July F :
Background / Previous Auctions :
Medium Term :
The Friday May 16th range of 7639- 7182 looks like a completed bell curve now as the market has successfully auctioned out the entire range building volume.
Short term :
Trend up from 7555 JulyF on 30th June. 1st support for this trend up for the current week lies at 7717 just below the huge buying zone of last week and then at 7639.
The market closed near the 7639 zone pointed above twice.
Observations in Tuesday’s session :
1) We were looking for 7708/20 below VAL from Monday with stops above 7790 but the ferocity of the selloff below 7708 caught many by surprise
2) Day type was trend structure with a closing near the extreme and vwap placed at 7724
3) Profile has lows at the VPOC from 30th June and HVN of the trend at 7620.
Hypothesis for Tuesday :
As in any trend day we look at the open for confirmation of continuation or otherwise
1) An open below 7620 tomorrow will drive the auction lower to the excess seen at 7555. This is the more likely scenario if we stay below 7647 in the first half tomorrow
2) Longs come into play above 7652 with stops below 7620 for a visit to 7680 and possibly 7707 as they have previous interest.
3) The more likely auction would be a 2 way process between 7620- 7680 tomorrow to explore opportunity.
BankNifty July F :
Background/ Previous Auctions :
Medium Term :
Friday May16th huge range of 15888- 14418 June F provides a background to the entire moves we may see in the BNF for some time.
The updated auction of the JulyF is here : http://prntscr.com/3wrs9g
Short Term :
14930 is the last support in the BNF below 15470 before it runs to the lows of May16th at 14418.
Observations in Tuesday’s session :
1) The bnf got rejected at Pull back highs near 15540 even as hypo 2 and hypo 4 played out fully
2) Day type was trend day with close at the lows and the 2 day fall in BNF is now 752 points
3) Spike seen between 15270 and 14970 of approximately 300 points
4) Spike rules apply at open – Visit glossary section to know more on spikes
Hypothesis for Tuesday :
1) If we open above previous low of 14973 then BNF will first run into resistance at 15150 followed by spike high of 15270 and then 15320. Longs for 15150 early at the open will have stops below 14940.
2) If the market finds sellers near 15170 then shorts can be initiated again with sl above 15210 for 14915 as a target.
3) All bounces to 15320 will now be used to short for positionals with SL above 15470 for a look below 14930.