Weekly charts (13th to 17th July 2020) and Market Profile Analysis

Nifty Spot Weekly Profile (13th to 17th July 2020)
Spot Weekly – 10902 [ 10933 / 10563 ]

Previous week’s report ended with this ‘The overlapping Value on all 5 days of the week meant a very narrow Value Area range on the weekly too of just 60 points as Nifty formed a perfect Gaussian Profle with completely higher Value at 10746-10764-10806 and has a very good chance of giving an initiative move away from here in the coming week

Nifty opened higher on Monday as it tagged the VAL (Value Area Low) of 6th March (chart shown above) and left a small selling tail in the IB (Initial Balance) but remained above previous week’s high staying in a narrow range of just 51 points till the ‘C’ period after which it made an attempt to probe higher in the ‘D’ but got rejected from the morning tail indicating lack of new demand and this led to a trending move lower as the auction got back into previous week’s range & Value almost completing the 80% Rule in the narrow Value Area of 10806 to 10746 aa it made a low of 10756 before closing the day at 10803. This imbalance continued on Tuesday as Nifty not only opened lower but continued to drive down as it moved away from previous week’s Value leaving yet another selling tail in the IB and made multiple REs (Range Extension) to the downside as it marked a 3 IB day while making a low of 10563 as it just about managed to hold above the VPOC of 10557 & the FA (Failed Auction) of 10562 it had left on 2nd & 3rd July respectively and this was an important signal as the day closed at 10607. After 2 big days on the downside, a retracement was expected which came in the form of almost a 100 point gap up on Wednesday as the auction opened above previous day’s Value and for the first time in the week left a buying tail in the IB and made multiple REs to the upside till the ‘E’ period as it tagged 10827 completing the reverse 80% Rule in the weekly Value. Nifty then made a marginal lower high in the ‘F’ period which indicated exhaustion in the upmove which led to a pull back in the G period where it made a low of 10762 and seemed to be taking support at previous week’s prominent POC but the subsequent probe higher could not repair the poor highs of the day and in fact left a lower PBH at 10814 and this triggered a huge liquidation break of 235 points in the next 2 periods leaving a Neutral Extreme Day with the reference for the next day from 10683 to 10577. That the previous day’s fall was more emotional was seen on Thursday as the auction opened higher not giving any follow up to the Neutral Extreme profile and more importantly left a buying tail from 10628 to 10595 in the IB which was an indication that the downside for the day was limited as Nifty balanced for most part of the day building volumes at 10670 forming a ‘p’ shape profile for the day before spiking higher into the close from 10708 to 10755. This spike got accepted on Friday with a hat-trick of buying tails in the IB after which the auction made a slow probe higher repeating the previous day’s pattern of forming a ‘p’ shape profile but was more symmetrical as it left made similar highs at 10835 in the ‘E’ & ‘G’ period and mirrored it on the downside with similar lows of 10781 in the ‘D’ & ‘I’ periods. The initiative buying tail being defended then led to a huge short covering move into the close as Nifty left an important extension handle right at previous week’s high of 10848 as it made new highs for the week getting into the Value Area of 6th March tagging that VPOC of 10903 and made highs of 10933 before closing the week at 10902.

The weekly profile is a Neutral Extreme one on the upside which also resembles a DD (Double Distribution) with both range & value forming an outside bar compared to previous week. This week’s Value is at 10644-10806-10836 and the immediate reference for the coming week would be the spike close of 10848 to 10933. On the downside, we have a prominent weekly POC at 10806 which will be the important reference and if broken could lead to the filling up of the low volume zone of this week’s profile from 10780 to 10690 with the VPOC of 10670 being the support to watch. On the upside, acceptance above 10933 can bring a test of the VAH of 10981 of 6th Mar and the huge selling tail from 11035 to 11269 with 11224 being the VAL of the 4-day composite and 11290 being the VPOC.

Click here to view this week’s auction in Nifty with respect to the previous week on MPLite

Profile of 6th Mar and the 4-day composite of 2nd to 5th Mar to overcome on the upside

Main Weekly Hypos for Nifty (Spot):

A) Nifty needs to sustain above 10903 for a rise to 10965-981 / 11025-044 / 11082-106 & 11131-150
B) The auction staying below 10894 could test 10848-836 / 10806-781 / 10740-713 & 10690-661

Extended Weekly Hypos

C) Above 11150, Nifty can probe higher to 11184-224 / 11268-290* & 11345-389
D) Below 10661, the auction can fall further to 10628-609 / 10562-557* & 10491-421*

NF (Weekly Profile)

10905 [ 10936 / 10553 ]

Previous week’s report ended with this ‘The auction has closed around the prominent TPO POC of 10752 and looks set to give a big move away from this balance in the coming week(s)’

NF opened higher on Monday but confirmed a daily FA at 10879 triggering a trending move lower till Tuesday afternoon as it completed the 2 ATR objective of 10583 and went on to make a low of 10553. The earlier FA on daily time frame at 10533 not getting a revisit in spite of ‘T+7’ days meant that it was now a positional reference as the auction made lows of 10591 & 10581 on the next 2 days continuing to form a balance over the larger timeframe of last 9 days. Friday saw NF moving away from this balance in form of a weekly spike as it revisted Monday’s FA of 10879 and went on to hit 10936 before closing the week at 10905 leaving a Neutral Extreme profile on the weekly which also represents a DD (Double Distribution) with a prominent POC at 10788 and like Nifty has formed an Outside Bar on weekly both in terms of range & Value. This week’s Value is at 10647-10788-10866 and the spike reference for the coming week would be 10879 to 10936.

BankNifty Spot Weekly Profile (13th to 17th July 2020)
Spot Weekly – 21967 [ 22657 / 21027 ]

Previous week’s report ended with this ‘22273 would be the level to watch on the downside below which the auction would remain weak for a probe towards the VPOC of 22135, weekly FA of 22040 and below it the weekly VPOC of 21890 as immediate targets

BankNifty opened this week with a gap up for more than 200 points but confirmed an ORR (Open Rejection Reverse) Down as it got rejected from Friday’s VAH leaving a selling tail in the IB and went on to make multiple REs lower as it left an extension handle at 22381 forming Value below previous week’s Value as it broke PWL & FA of 22040 and made a low of 21980 closing as a Double Distribution Trend Day Down with the DD selling tail from 22277 to 22381. On Tuesday, the auction tagged the weekly VPOC of 21890 at open itself with a gap down open and continued the imbalance with a Drive Down as it went on to make new lows for the month at 21222 where it stalled the downmove more as a sign of exhaustion rather than by fresh demand represented by the poor lows it had left for the day and gave a retracement back to 21392 at close. BankNifty continued this retracement on Wednesday as it not only opened higher at 21634 but left a buying tail in the IB and went on to make multiple REs higher in the first half of the day as it tested the gap singles of Tuesday making a high of 21935 where it got rejected leading to a fresh leg lower falling by 705 points which was the biggest daily range in 15 days but still could not repair the previous day’s poor lows as it made a similar low of 21230 closing as a Neutral Extreme Down Day. The auction opened at the upper end of the Neutral Extreme zone on Thursday but was also an OH (Open=High) start which was sold into and this led to big fall in the ‘A’ period as it made one of the biggest range of 425 points making new lows for the month at 21027 stopping right at the previous daily swing low & FA of 21026 it had left on 29th June. The ‘B’ period made an inside bar but importantly left a tail at lows and the FA of 21026 being defended gave an indication that the downside probe which began from previous week’s high of 23080 had come to an end. This got more confirmation as BankNifty defended the buying tail in the ‘D’ period and went on to spike higher into the close from 21504 to 21671 after forming a balanced profile for most part of the day. Friday open saw the auction accepting this spike which was a bullish sign but then made a failed C side RE at 21844 which got confirmed as a FA as the D period made new lows for the day at 21551 but once again this RE lower also got rejected as BankNifty got back into the IB and formed a Gaussian Profile in a narrow range of less than 300 points for most part of the day but the acceptance of previous day’s spike & Value forming higher led to yet another spike into the close and this time the spike was a bigger one from 21844 to 22065 which negated the morning FA of 21844 but at the same time confirmed a new FA at 21551 and almost tagged the 1 ATR objective of 22078 but falling just short of the VPOC of 22103 it had left in Monday’s DD profile which will be the immediate reference on the upside in the coming week.

The weekly profile represents a ‘b’ shape long liquidation profile with Value completely lower at 21240-21680-21840 but the close at 21967 puts BankNifty as of now in a Neutral Zone with the PLR (Path of Least Resistance) slightly on the upside but will need to take out that extension handle of 22381 for a probe towards the weekly VPOC of 22810 in the coming week. On the downside, 21840 would be the important reference below which the high volume zone of 21730-21680 would be the support to watch.

Click here to view this week’s auction in BankNifty with respect to previous week’s profile on MPLite

Main Weekly Hypos for Bank Nifty (Spot):

A) BankNifty needs to sustain above 21980 for a probe to 22078-103* / 22170-276 / 22381-480 / 22550-651 & 22735-810**
B) The auction below 21973 could test 21903-831 / 21770-680 / 21609-550 / 21500-390 / 21314*-280 & 21171-120

Extended Weekly Hypos

C) Above 22810, BankNifty can probe higher to 22898-950 / 23029-138* / 23180-266 / 23333-450 & 23565-624*
D) Below 21120, lower levels of 21025 / 20953-880 / 20774-733 / 20640 / 20570-445 & 20390-320 could come into play

Additional Weekly Hypos

E) If 23624 is taken out, the auction can further rise to 23716-822 / 23901 / 24025-074 / 24181-280 / 24337-414 & 24509*
F) Break of 20320 could lead to a fall to 20211*-100 / 20031 / 19890* / 19780 / 19648 & 19507-450

BNF (Weekly Profile) 

21971 [ 22664 / 21025 ]

BNF has also made a ‘b’ shape weekly profile with completely lower Value at 21242-21723-21827 and has closed way above the Value at 21971. The auction has immediate supply points at 22180 / 22274 & 22430 which if taken out can test the weekly VPOC of 22789.