Last week we put 7854 spot as our KRA to check for bias, but the Nifty traded lower all week from a high of 7824 spot and hit a low of 7575 during the week. Support at 7525( 2014 POC) is close by and the coming week should tell whether the 2014 POC will stay and support the bull or not.
We expected a 200 point fall below 7850 last week, but the index hit 250 lower.
Lasst week’s report can be reviewed here: http://vtrender.com/nifty-bn-weekly-view-spot-for-07-dec-11-dec15/
In the week to come, we are nearing the 2014 POC of 7525 but there is also short term supply building up from 7700 and 7850 spot. Auction Market theory does not point to a direction but gives us a lot of valuable information on where the market has built long and short inventory and shows us the likely path the auction may take. We try to pinpoint a few important levels for the move in the current week.
Nifty TPO weekly chart:
In the week gone by, Monday and Tuesday, as well as Wednesday, were trend down profiles which finished in the lower quarter of the profile and below value. Thursday was an inside day and looked set to form a balance and put an end to the IPM from 8005. However Friday could not hold above the VAH of the past two sessions and the Nifty drifted lower through the 2-day value ( 80% trade) and finished lower.
The Profile is close to the 2014 POC of 7525 and should put in a bounce as long as the level holds. However, any bounce may run into renewed selling near 7700 and 7850 spot during the week. A close above 7750 in the coming week may serve as a confirmation of the selling abating. However, a drop below 7525 can bring 7440 and 7340 during the week.
BankNifty TPO weekly chart:
The BN trended lower all week and lost 770 points during the week. We have a trend down profile in the charts.
There is support in the BN around 16170- 16280 and if held can create a rise to 16600- 16640 kind of levels. However if this support is violated then BN can drop to 15820- 15740 during the week.
A cross above 16650 can create some more rise to 16860- 16900. But the test of 16900 should bring some more selling into the index.
We have used quantitative analysis and the principles of Auction market Theory to arrive at our levels. For running updates of the daily and weekly moves and to join our community visit – Vtrender Trading Room