The dual auction which has been aggressively dominated by bears this last week continued on Friday but for a change, after the first 30 minutes of the session, the sellers stayed away and the Buyers dominated the auction on Friday to close at the highest point. The auction tested the Failed auction zone at 11650F where we had seen supply twice in the week gone by. After being absent for most of the session the sellers showed up again aggressively at the close near 11640 levels. On the OrderFlow charts, we witnessed heavy selling which was as big as the responsive…

For the drop in the Nifty from 11775F, we have been calling for a balance and we saw the first evidence of it today. But the day was not a quiet balance but highly volatile and in a big range where we saw yesterday’s big buyer at 11470 being tested again. We mentioned that he would be tested and he was. But the test produced a sharp responsive buying again from the lows and the Nifty hit the VPOC at 11600 F again. There was again sharp selling/ long liquidation on the move above 11580F today and the 11580- 11600…

An open auction within the range of Friday’s profile saw a sudden spike down at the close and a test of demand at the VPOC from 24/08. It started with the initiative selling at 11735 and picked as the Nifty broke 11690, a level most participants had expected to hold. There is a trapped buyer near 11690 but towards the clsoe, we saw a lot of demand entering the market. Spike rules apply at the Open and the lack of sell-side pressure should create a bounce as long as the index trades above 11610 roughly. However, on the higher side, there are now 3…

The auction on Friday was again different in both the Nifty and the BankNifty. The Nifty opened as an open auction and tested the zone below 11550 where it did not again see new supply . It closed near the DPOC/ Vwap of day at 11570. Incidentally, 11570 was also the weekly POC. The BankNifty opened as an Open Test drive and went on to test the Initiative seller from Thursday’s auction at 28170- 28200. Supply overwhelmed demand at this pivot and the inability of the open buyers to protect vwap on the test led to long liquidation and a…