Day 4 of the new series was a mix of Short Covering and Long Liquidation but even as the market rose by 112 points there was no evidence of an Increase in Market Open Interest. Skepticism still prevails and we maintain that the upswing may be used to clear long inventory.
In the Paras below you will find my daily plan for the day at the bottom with weekly support and resistance levels updated on the spot and the medium term auction. It’s a view on 3 different timeframes. Auction Market Theory tells us where to trade. The Order Flow will show us when to trade.
Nifty May F 
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| Background / Previous Auctions :
Medium Term: On Friday May 16th 2014, we saw a range of 7560- 7125 (spot prices) and we believe it forms the backdrop of the moves we may see in the Nifty for a considerable amount of time, as it was a 5 sigma event. The auction remains positive as long as we close above the highs of that day (May16).There was a failed auction noted at the lows on 17/10 at 7723 which is a reference point and support line for the future. At 9119 the market may have put in a top for the year and should roughly consolidate in the 8050- 9119 zone for the rest of this year. (We are revising to 8050 about 150 points lower based on March data) .
Weekly levels :
(first updated 09/05) Bias Neutral – Buy dips/ sell rises :
(On spot prices)
Last week the auction centered around the previous POC weekly of 8229 spot and the Nifty moved up n down from there and closed near it on friday.
The range done was 8355- 7997.
For this week the profile suggests a continuation in the range and it will be unlikely for the Nifty to move out if 8355- 7997 in the coming sessions.
We see 8233 spot pushing the index upto 8335 spot again where we expect the seller to come back.
Lower down 8180 spot is support for the index and a trip below would mean 8040 back in play.
Bias is neutral for the coming week- Buy Dips and Sell Rises within the Ref area marked above.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF profile showed buyers at 8146 and 8155 who prevented downsides #) vwap of the day was at 8201 with volume of 138.9 L (Less than the Previous session) #) Excess lows noted below were visited. #) Profile has excess at 8344 right down to Monday lows of 8250. This is signs of rejection of Monday’s auction. #) Value areas are at 8224-8196-8184 for the session tomorrow. For using value areas effectively visit : http://vtrender.com/popular-market-profile-trading-setups/ #) Ref lines are at 8252 and 8183 for tomorrow’s session for breakout moves. #) The breakout ref lines are price objectives of the move above VAH and PDH and below VAL and PDL. #) Discl – When we mention Buyers/ Sellers we point to and infer aggressive players. ———————————————————————————————————— #) Minor excess noted at 8020 on 07/05 #) Pull back High of 06/05 at 8184 #) Profile pf 04/05 rejected and new excess from 8344. #) Sellers seen at 8320-8334 and 8304 and 8294 to 8280 and 8224 early in day on 06/05 #) Excess at 8404 on 27/04 #) Excess at 8456 on 24/04 #) Excess at 8678 on 20/04 #) Day saw sellers at 8774 today ( 17/04/15) #) Day saw sellers active at 8836 on ( 16/04/15)
Hypothesis :
( Based on May Futures)
K.R.A is 8252 ( K.R.A= key reference area)
Hypo1) If NF auctions above 8252 then it can move to 8288 and 8316. . Sl for this view 8220.
Hypo 2) If NF auctions below 8220 it can drop to 8183 and 8147 . Sl for this view is 8257.
BankNifty May F :
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| Background/ Previous Auctions :
( updated 22/03)
Medium Term- 20520 is now showing excess and the BankNifty has not been able to stay above the 19200- 19300 zone which hold vwaps for Jan and Feb. There has been some serious selling seen in the BankNifty at the 19370 spot levels in March . This makes us revise our opinion of the 18400 spot holding and we should see the index drifting down below to 17600- 17700 spot levels over the coming sessions. We will update our view to the potential next drop to 15900/ 15600 zone and finally 15100 once we see an auction at 17600 levels.
Weekly levels :
(first updated 09/05)
(based on spot prices)
Last week a strong seller emerged at 18580 spot and dropped the index below 18150 listed support and bias point to 17246 new year lows. We are playing a test of that 18150 spot broken area but we believe the seller will step in once the re test is done.
Ahead of that 18150 spot supply zone we see a line of supply at 17980 spot. The index can show short covering only if 18160 is crossed again.
Support during the week is at 17700
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#)The BNF profile showed buyers at 17520. #) vwap was at 17768 with volumes of 38.8 L (less than the previous session) #) Anomaly at 17615.for repaired #) Also Minor excess seen at 17286 #) 17520 is excess #) Value areas are at 17832-17760-17676 for bias. . For using value areas effectively visit : http://vtrender.com/popular-market-profile-trading-setups/ #) Ref lines are at 17912 and 17685 for tomorrow’s session for breakout moves. #) The breakout ref lines are price objectives of the move above VAH and PDH and below VAL and PDL.
————————————————————————————————————— #) Pull Back high of 06/05 at 18070. #) Sellers seen at 18375 and 18025 and 17960 later in the day on 06/05 #) Excess at 18520 on 06/05 #) excess at 18750 on 17/04 #) excess also at 17898 on 28/04
Hypothesis :
( Based on Futures)
K.R.A is 17741 ( K.R.A= key reference area)
Hypo1 ) If BNF auctions above 17742 then it should attempt to move to 17911 and 18030. Sl for this view is 17640
Hypo 2 ) If BNF auctions below 17640 then it should drop to 17567 and 17475 . Sl for this view is 17745 |