Last week was expiry and the market played out to the expiry math as sellers got a chance to offload as lower levels during the week.
As we look at another week, much of what applied at the start of last week would apply starting tomorrow also, the only difference would be that the system does not show as many shorts at the start of this week as last week.
The downtrend vwap in Nifty and BankNifty is in the same place as last week just a few points lower as it slides down.
The chart has the same structure as last week.
The vwap line is falling at 5557. Below last week's high of 5528 and this vwap of 5557 we expect the seller to remain dominant with only a move above these 2 points inviting some short covering in the markets.
The BankNifty structure is even more bearish as it stays below the high volume point marked at 9600-9770.
Only a move above this high volume point can force shorts to cover first to 10250 and then vwap which is at 10940.
The rules for trading a higher time frame remain the same as those we use in the trading room for intra day.
Buyers above Value High and Vwap and sellers below.
The Only point being that when you look at a higher time frame like the weekly, give price more than a few hours to accept or reject the weekly value areas or vwap.
Last week we mentioned about the weekly value area.
Here is the current chart :
The week gone by had 2 moved through the value area as new buyers failed to take advantage of higher prices during the first day of the week . The second half of the week again saw price move from the weekly value low to weekly value high.
The Nifty's value area is 5485-5408- 5280.
Like last week a failure to hold above 5485 would mean a trip in between the value area and possible 5280 again.
Above 5485 this would travel to 5555/ 5616 and 5712- 5760 above 5616.