In the weeks of 06-10July and 13th- 17th July we had placed a pivot at 8370. Our OrderFlow tools did not pick up huge selling interest below this number and on Monday of the week gone by the bulls seized the initiative by climbing above weekly VAH on monday itself and hitting the 200 point objective right above it. This is Auction Market Theory at it’s finest.
Our View last week – “We believe that according to the Auction Market Theory should the index manage a move abv 8440 in the coming week it should move to test the sellers of 20th April at 8620 and the NPOC at 8648 from 17th April.”
The index hit 8643 on Friday. Last week’s post can be reviewed here – http://vtrender.com/nifty-bn-weekly-view-spot-for-13-july-17-july15/
Outlook : Vwap mentioned last week at 8420 currently is huge support for rest of this week/month and into August also.Objective of the current volumes is at 8750 spot and is resistance for coming week. More likely a 8510 to 8720 trading band for coming week.
Weekly chart of Nifty spot above and right below is the Monthly TPO chart
Value migration was higher through the week and selling responses were subdued. We see the Low Volume Node LVN created at 8518 as first support for the week. We believe that dips to this point would be used to cut down shorts in the market and build long exposure for August.
We also see a High Volume Node ( HVN) at 8450 which is near the vwap for July at 8420 currently. Thus 8420- 8450 will have stops of all long positions created recently.
The volumes project a visit to 8750 at least once this series and we remain positive as long as we close above 8520 this week.However the auction of Friday would suggest that levels of 8710- 8720 seen immediately at the start of the week should be used to cut down weekly long positions. Thus our weekly view would be an 8720- 8510 kind of range in the coming week.
BankNifty :
The first chart above is that of the BN weekly spot and the second one if of the BN monthly TPO’s.
Outlook : Maintain 19360 mentioned last week as supply point. Difficult to see BN close above 19420 for the rest of this settlement. However a strong layer of support now created at 18900 which was last 2 week’s resistance
In the week gone by the BN broke above 18900 on good volumes and a Buying tail. There are some heavy volumes seen at 18860- 18920 now which makes us believe that this is a strong rising support and good enough to counter the heavy selling we have seen around 19300 in the past few months. Thus dips to 18900 present a good buy opportunity in the coming week with stops below 18820 on closing basis. That volume is like the Nifty noted above and should be used to build long exposure.
The 18600 mentioned last week holds the current vwap of July and is support 2.
On upsides we see supply at 19300 and 19360 spot as mentioned above. We believe that all longs closer to 19360 should be kept on hold/ hedged till we get a convincing break above 19420 spot.
For the week we see a 18900- 19300 kind of range and actionable or trending for new swing positions if one of the two break away .