Nifty : With 2 sessions to go before the November expiry, the Nifty put in an Inside day today and a balanced profile in the lower half of yesterday’s p shaped profile.
We had noted yesterday, on how the longs from Friday’s profile had closed their positions leading to a move lower from 4836 yesterday. Today’s profile had buyers controlling most of the day’s action, before a late sell-off from yesterday’s POC made the market visit the lows yet again. The close was near dpoc and vwap with a small failed auction at 4780 at the day’s lows.
The up moves off the open measured 50 points from 4790 to 4840, another 60 points from 4800 to 4860 but still contained within the 67-70- points we had noted for this fall from 5196 levels.
The largest sell reaction was 4860 to 4780 for a total of 80 points, once again asserting seller domination over the main trend which is down in all time frames.
Large volumes were seen at the lows at 4785 and the POC was between 4809 to 4817.
The 3 day value ares is 4884- 4804 and the expiry closing would be on the violation of one of these levels. Up above over 4884 we see a thin distribution and poor structure and the possibility of buyers rushing the market upto 5022, should there be a short squeeze.
On the other hand should the market spend time below the 4804 level and take out the lows, settlement blues could even see levels of 4600 in the series.
Bank Nifty :
The BankNifty achieved balance again with a close as a normal variation day but one which did not hit the POC of the previous day unlike the Nifty.
The profile is also inside and Balanced.
In balanced profiles the key is to watch the development of the IB with respect to the POC of the previous day and the better trades are to wait for exit of range and value.
Large one time volumes were seen at 8700 and 8695.The POC is 8638 to 8617.
The upmove of the morning from 8542 to 8687 measured 145 points.The second upmove from 8594 to 8710 measured only 126 points. The sell reaction from 8710 to 8545 was the biggest of the day and measured 165 points.
The composite profile gives a value area of 8729 to 8596.Right above the value area is the POC from 18/11 above which a move to 8995 will be easy for buyers.
Sustaining below 8596 can bring 8367 and 8176.
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