The first week of the new series of April was an eventful one as we saw 2 days of a rise and then a day of fall which was followed up by another 2 days of rise. Market breadth was good through the week and the McClellan oscillator (MO) which we track for market breadth hit a very high reading of 88 on Friday. You can track the MO at – https://vtrender.com/desi-mo-mcclellans-oscillator-for-nse-6th-apr-2018/
That reading of 88 suggests the market was heated as of Friday close and due for a pullback.
From an auction market theory perspective, the first week of April did not do any damage below the settlement price of March series near 10140- 10155 F which is a short-term bullish outlook for the new series of April. However, up ahead is the highest volume concentration of 10355 in the March series which would be initial resistance to any bounce and we saw supply building up on Thursday and Friday as the Nifty tried to auction at this point.
So the weekly auction is at the crossroads and meeting supply at the highest point traded in March series near 10355 spot but unable yet to find any traction below 10140 spot – settlement zone of March.
The coming weeks should tell us which of these 2 points hold or break and would be the pointer to the next 200 points in the Nifty.
Nifty Weekly Profile ( spot) :
The auction last week was traded in a range between 10350 and 10111 with 2 zones where the volume was distributed almost equally and the highest in the week. We had these 2 zones at 10317 and 10134.
The importance of 10350 and 10140 have been highlighted already above.
We anticipate the coming week to trade in a range between 10350 and 10140. This is our primary hypothesis for the week
A bullish view would be needed if we cross above 10385 anytime during the week which needs to be traded with long futures or a 10500 call as the destination could be around 10500-10516 to 10562- 10577 on the higher side. In MarketProfile we call them destination objectives of the auction process
A bearish view is needed below 10140 in which case we would expect a test of 9940 next.
These are our weekly projections and broadly the setups we would look at to trade in the coming week subject to a confirmation from our OrderFlow charts.
To know more about how we use these setups to trade and to get actionable trading advice subscribe to the VTR ( Vtrender Trading Room). More info at-https://vtrender.com/trading-room/. Pricing details at – https://vtrender.com/pricing/
BankNifty Weekly Profile ( spot) :
The BankNifty traded last week in a range between 24933 and 24063. Like the Nifty it had 4 of the 5 sessions running higher and the Wednesday session tested 24065-24100 zone again.
Overhead supply is big and strong at 24900-25050 zone and the auction would lose it’s upward momentum if the buyers do not defend 24700 early in the week. Our anticipation in that case would be a drop down to 24400 and 24300 again.
There will be a bigger weakness in the BankNifty if 2426o is not held in which case the price probe should continue lower to 23750 and 23470.
On the upper side, any move above 25050 on volumes should move the index higher to 25385 and 25465 zone.
These are our weekly projections and broadly the setups we would look at to trade in the coming week subject to a confirmation from our OrderFlow charts.
To know more about how we use these setups to trade and to get actionable trading advice subscribe to the VTR ( Vtrender Trading Room). More info at-https://vtrender.com/trading-room/. Pricing details at – https://vtrender.com/pricing/