Last week the profile was balanced ( Left of chart) . It's such profiles which tell us that a major move can happen in the market place.
Quite simply it's positioning for imbalance from a period of balance.
The move from the POC of last week was quick and was followed through all week to have a market which closed at the upper end of it's range.
The grey shaded areas on right show the structure to be a double distribution patten for the week. There are two possible ways in which a DD can play out for this expiry.
If we manage to open on Monday and hold above the current week's high then clearly we would be set for higher levels during the week. This goes in line with the theory that the market is operating above value and price is probing for acceptance higher.
The other possibility is that the market can move in the zone of today's open and the High volume point of Thursday and look for acceptance there.
If we look at the profile structure for this series, we find that this is looking as a higher possibility as far as value is concerned.
The above chart shows that the move of today is not value. and a rotation back seems to be having high odds at the moment.
Bear in mind that there is much headline risk from Europe and on Tuesday when we open, irrespective of what we see today, the price on the screen must be traded.
The chart is a composite from November but showing the last few profiles in blue streamers.
The composite structure is on the right in black.
The pink horizontal which cuts through is the composite POC as well as the largest volume exchanges during the past three months.
It's safe to assume that new buyers reentered at this price and will look to buy every dip till this point.
Remember this line – it is at 5292 now.
Today's profile and structure and the overlapping volume of the past few sessions has the potential to take the market higher by 700 points in the next few months.I'm not the one to sit back and make predictions on markets, but we we will continue to monitor the movement and see if there are any changes which can happen to this view. Once we have a view, you sit back and enjoy the ride whist adjusting your Trailing stop and keeping an eye for possible changes.
Bank Nifty :
The Bank Nifty was the first to move out yesterday above the value areas posted on the twitter page yesterday. It's always been a leader and a very important cog to see if these are any changes to the larger view in the markets.
The composite shows high volumes in black and a POC a little lower at 9791. As long as this price is defended there is nothing to worry in terms of an imminent fall.
Yesterday's high volumes at 10610 are also a nearby support.
This move could be a potential game changer. I just remarked on twitter a while earlier on how we are sittiing currently at the highest volume points for the entire drop from 6300 levels. The market may be just ready to pick up steam above those levels.