Month: July 2011

Perspective : With all the news based triggers out of the way- this market would be back to technical and inherent strength and weaknesses.

Back Ground :- A normal distribution on Friday as the market waited for new information.

Chart Speak :

– Another bell shaped curve.
– High volume node at 5553 to slow down action if there is a big gap up.
– Beyond this PR2 at 5570 will resist the upmove
– PR3 is 5608 and stop loss level for all shorts
– Prominent POC is 5490 from a bell shape and will be an important ref point if not visited today
– high of friday at 5529 and pr1 at 5532 will be useful reference points for a gap-up.

The above post is for purpose of education only. Similar charts are posted for the BN, LT, RIL, ICICI, SBIN everyday on our premium website http://www.vtrender-2.com

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Perspective : A new series opens on the backdrop of selling based on the RBI event and uncertainty over the debt issues from the world’s largest economy.The larger time frame may still be on the sidelines, waiting for an opportunity to enter or exit.

Back Ground :- The down auction from 57xx levels has already shaved off 250 points in the index in 3 days to create an imbalance in the market. The markets showed a return to balance by putting on a bell shaped profile yesterday.The move out of this bell shape is the new auction.

Chart Speak :

– A bell shaped curve.
– a Prominent point of control at 5502 with high odds of being visited.
– Bias below 5503 is negative today.
– 5459 is PS2 and 5437 is PS3.
– Upper resistance at 5525 which is PR1.

The above post is for purpose of education only. Similar charts are posted for the BN, LT, RIL, ICICI, SBIN everyday on our premium website http://www.vtrender-2.com

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The chart shows that through the series the region of 5570 evoked the maximum interest amongst traders this July and maximum volumes were exchanged there.

This makes 5570 the fairest value for price or the region which holds max value for traders.In an ideal scenario the expiry should happen at this price or near this price.The upper level is represented by a VWAP at 5617. This region and above represents the point at which the expiry should not happen.Generally a Point of control below vwap means a seller dominated through the series and the expiry should favor the seller.

Bank Nifty July :

Whilst looking at the BN monthly profile we see price stretched or too far removed from profile lows or value. This means that the current lot of sellers in BN are not enjoying great value and the market can easily do a short covering number on them.

Value low is at 11176 whereas the best price for the series was at 11250 which is where the vwap and the point of control converge.

The most probable scenario would be for price to migrate closer to the best value tomorrow.

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Perspective : Yesterday’s news based selling can be construed as an emotional reaction of the markets to anticipation. In such cases, it is better to react to the market’s present situation on a more longer term time frame.

Back Ground :- After cutting short positions on Monday and Friday,yesterday’s slice through the value area show a rejection of that zone and those higher prices. The value area of Monday was covered in single prints, as traders took the market back in the previous bracket

Chart Speak :

– We are back in the previous bracket of 5675-5536
– Expiry pressures and news from overseas markets continue to make this an emotional trading environment.
– Most of yesterday’s distribution seen between 5616 and 5562, again showing the market’s likeness to the previous bracket.
– As long as 5548 holds, recovery efforts will be seen.
– Minor strength above 5589 towards 5610/ 5630.
– A close above 5605 can put the market back up to 5675.

The above post is for purpose of education only. Similar charts are posted for the BN, LT, RIL, ICICI, TTM, SBIN everyday on our premium website http://www.vtrender-2.com

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What was interesting to note was the sell signal generated 2 mins ahead of the announcement as smart5 money started liquidating positions built since Friday.

The trade returned a handsome 255 points, once again establishing the BN as a premier OF indicator. Our records put the success percentage at over 91 % for the Bank Nifty with each gain measuring over 70 points.

What’s important to also note is the PP0 which was not encouraging for longs off the open. I’ve said it before that a market is short below PP0 and long above it. It is an excellent stop n reverse level for the day.

Today’s fall puts the two markets back into the balance zone where NF 5535-5550 is the lower support. The huge volumes may be traders adjusting inventory which had gotten too long ahead of the announcement.Tomorrow is a 3 I concept day.

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Perspective : The first part of today’s session will be quite (or anticipatory) ahead of the RBI policy announcement.Regardless of what the policy says, It’s the market’s reaction to it which is supreme.The market has climbed 150 points in two days, anticipating an early end to the rate hike policy.Anything otherwise can send the market back into the bracket.

Back Ground :- The P shaped profile witnessed first on Friday played out fully today as traders cut their short positions.This market would now require buyers to step in to take the market higher.

Chart Speak :

– A double distribution ( DD) which is incomplete in the upper half.
– We treat a DD day as two separate auctions, with the next session to confirm the price move.
– A Minor buying tail at 5616 near the value area low of the previous day.
– 5661 divides the two auctions and price acceptance above 5661 will keep the bullish momentum intact.
– Resistance at 5730. PR 3 for the day is 5775.

The above post is for purpose of education only. Similar charts are posted for the BN, LT, RIL, ICICI, TTM, SBIN everyday on our premium website http://www.vtrender-2.com

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Perspective : A sideways trading range, called a bracket in Market profile is best traded through short and sharp moves whilst being aware of the potential of the market to stage a breakout at the extremes.

Back Ground :- A sideways movement as evidenced by a side-on Point of control (POC). Bracket extremes defined clearly in chart above.

Chart Speak :

– The open on Friday at Thursday’s range highs tested the Point of control and moved sharply higher.
– A P shaped profile ( structure of Friday resembles letter P ) indicates that the market moved up on short covering, not a barometer for internal strength.
– Value areas defined at 5649-5619
– Minor strength can be seen above 5654 which can bring 5678 and then 5701.
– support below is at 5583.

The above post is for purpose of education only. Similar charts are posted for the BN, LT, RIL, ICICI, TTM, SBIN everyday on our premium website http://www.vtrender-2.com

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