As the Nifty trades above the 50 and the 200 dma we have noted an increase in the algo activity in the market.
These could be mostly system setups programmed to buy above the moving averages. The high number hit in the FII activity both in cash and futures are a result of this ETF presence.
Incidentally the Buy figure of 87098 contracts by FII's yesterday was the largest in the past six months in terms of contracts bought or sold . Yesterday's vwap price of 5836-5846 September Futures would therefore be an important support for the market going forward,
Last week we traded a Time Setup on the BankNifty based on a higher time frame presence in the instrument.
Here is a chart which monitors the time at which a high or a low is made in a 60 minute period.
We have noticed the BankNifty do a high or a low at around 9.20- 9.25 in the first hour of the day.
We do not want to read much into that as it could easily be the Open Range Break traders entering or exiting positions.
But what drew our attention was the lows around 2.20- 2.25 pm each of which gave 200 points in the next one hour.
Since yesterday was a balanced profile with no longer time frame movement, the chart does not show the activity.
However since open we have seen the OTF in action in the banknifty.
Will we see the 2.20 play today?