Waiting for a new auction

The markets have been putting in a narrow range for these past few sessions.


For most people it's been a boring week of trading till date but the avid market profiler would be watching this sideways development for cues on the next leg of imbalance.


We have been following this chart :



Mp Nf2 1 Waiting For A New Auction


The market broke out of the January balance by leaving a selling tail on the 31st.


This was tweeted by Viren for his followers on the 31st . You can find that link here-  https://twitter.com/VirenRasquinia/status/296916341288493056


Momentum came in from the lows of that day 1 session later as initiative selling again added to the momentum.


That imbalance ended with the market balancing on the 5th and we have seen an extension of that balance ever since.


The range is defined between 5940 and 5994 till this noon.


At some point of time this balance will end and the market will start a new road to price discovery.


As an auction player you would note the tussle between buyers and sellers in this balancing mode and take longer term bets on a break only.


Judging orderflow is one way to know which side the market will eventually break out of.


So far based on what we have been observing in the trading room, there aren't many buyers seen at lower levels. Whilst that can change as the market continues to balance that change has to be driven by initiative activity on the part of buyers. That will happen only when they see the current price as value.


Till then the seller appears to be in control and is likely to drive the price lower.