Sentiment turned sour in the markets on the budget 2018 and long liquidation set in the markets. In last week’s post, we had noted that Jan was a trend up the profile with a vwap of 10721 and highest volume at 10610. The range traded in Jan was 11171 and 10404. We closed at 10760 on Friday with a low of 10736. Quite clearly we would be watching the vwap of 10720 on Monday. The vwap of a trend up profile holds important references for the week ahead as it was trend up.
The BankNifty traded a 27652 to 25233 range through Jan with a vwap of 26222 and the highest volume traded was at 25680. We closed at 26451 on Monday.
Last week’s post is at – https://vtrender.com/weekly-hypos-week-dated-29th-jan-02nd-feb-spot-prices/. The support at 10910 stands broken and we are trading well below the 11080 mark which would mean that 11100 would be difficult to cross now in Feb,
Our outlook for 2018 is at – http://vtrender.com/2017-done-heres-2018-can/
Nifty weekly spot TPO profiles:
The Nifty has broken below 11056 on good volumes and was poised at the volume cluster near 10730 at close. We also note the Jan series vwap at 10720 to be right here
The Friday close was in imbalance and we are not looking for any contra moves till the imbalance ends.
If the market stays below 10720 early in the week then the drop can extend a 100 points to 10600 and if that does not hold we can drop to 10440 as shown in the chart above. Strong imbalances tend to overcome volume clusters and use them to add further momentum.
On any upsides the 10930 zone is now resistance and would be used by the market to clear more long inventory. It looks unlikely that the market may come back over 11080 again in the month as that volume cluster from settlement day has liquidated already.
Bank Nifty weekly spot profiles:
The BankNifty is below the 27235 volume cluster and rising the thin profile to 26035 and 28515/ 25670.
Like the Nifty above if the Jan vwap is not protected we could drop to 25675 and 25580 by the time the week closes. The Jan vwap is at 26222.
The 26880 zone likely to provide a resistance on any probe upwards.
There is higher resistance at 27325 as highlighted in the chart above and the 27300 zone could be difficult to take out in Feb series.