Today the FED will announce it’s policy rate decision in an hour from now. I’m making this post earlier than that to reflect our thoughts prior to the news break so that any move away would be a sign of change.
The markets chose to be flat today and did not pre- empt the FED move as they have in the past.
The result was an inside day which closed near vwap and signify a neutral tone ahead of the event.
The BNF has moved largely within the 3-1-3 we had spoken about a while back on these pages.
The excess volatility of the instrument has made it difficult to pick up good decent intra day moves, but today was a realtively quieter session of only 137 points.
It was an inside day which closed at vwap.
The thing to note in today’s chart as well as the chart posted yesterday was the presence of a seller around 10-10.30 am period and near the 12320/ 12340 point who is driving the index lower.
If the BNF is in the same region tomorrow at 10.20 , we will watch for signs of similar selling
The profile was balanced with a good POC and a close at that POC.
Intra day we saw rejections at 12315 and below at 12178 and a move above or below these points will be the first sign of a vertical move developing.
There is a move above 12340 which can take BNF to 12450/ 12575 on short closure and can be traded with a stop just below 12300.
Similarly a move below 12178 can be traded with a stop at 12228 for 12105/ 12041/ 11920.
The other possibility from the day type is a move back inside IB even if a break confirms early.
Hence IBL or IBH will be the stops for all positions taken on the break of range in BNF
The NF profile also shows a nice balance and an inside day
Moreover the profile is also within the larger composite 6520- 6595 having explored both ends yesterday
A break of 6530 should bring 6489 tomorrow from where the friday move started.
6447 is the level to watch for below if 6489 does not show buying interest.
On the upside we will be on track for 6657/ 6680 if NF breaks above 6596.