Day 4 of the new series finally saw short covering in the closing hour . The BankNifty unwound roughly 3300 Index F contracts in last 30 mins and the Nifty unwound about 39000 contracts in the same 30 minutes. Short covering only serves to weaken a market and we won’t be surprised to see today’s lows being visited again in a few sessions.
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 02/05) maintain sell on rise :
(On spot prices)
The seller is dominant and the weekly time frame of the profile does not convince us of a low in place.
At 8180 close the possibility of a bounce of maybe a 100 points remains to about 8280 spot. But we maintain that rises will be used to create short positions.The expiry day showed long rollover happening in the closing minutes. We believe that these are stuck longs and would use higher levels to exit
We do not see the buyer in control till prices close above 8335 spot.
Through the past 2 weeks we have seen increased sell pressure from 8400- 8480 spot. Above 8335 spot this 8480 spot zone is the second level of supply on the index.
Lower down we see 8113 as a support followed by the yearly reference area of 8060. We feel that if the early part of the week sells off and reaches 8065 we could see a bounce from there.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#) The NF profile exhibited 2 time frame behavior today #) vwap of the day was at 8082 with volume of 165.9 L (Less than the Previous session) #) Minor excess noted at 8020 today #) Spike seen 8020- 8110 . NF positive tom above spike high 8110 which is also the KRA from Thurs. #) 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 8110-8082-8062 for the session tomorrow. For using value areas effectively visit : http://vtrender.com/popular-market-profile-trading-setups/ #) Ref lines are at 8116 and 8031 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. ———————————————————————————————————— #) 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 8117 ( K.R.A= key reference area)
Hypo1) If NF auctions above 8117 then it can move to 8161 and 8195. . Sl for this view 8080.
Hypo 2) If NF Opens and auctions below 8080 it can drop to 8030 and 7987 . Sl for this view is 8117.
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 02/05)
(based on spot prices)
We continue to see this index rotating till it does not close above the 18450 supply mentioned last week.
The Bias point continues to be 18130- 18170 zone for the current week and we would stay positive as long as the index trades above these points in the coming week.
Above 18450 the index should stretch the move to 18650 and 18725 where the seller may attempt a comeback.
Observations in Today’s/ Previous sessions :
(based on Fut prices)
#)The BNF profile trended lower below value and range of Wed #) vwap was at 17557 with volumes of 45.3 L (Little less than the previous session) #) Day profile shows anomaly at 17615. #) Also Minor excess seen at 17286 #) #) Value areas are at 17665-17485-17365 for bias. . For using value areas effectively visit : http://vtrender.com/popular-market-profile-trading-setups/ #) Ref lines are at 17551 and 17216 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 17441 ( K.R.A= key reference area)
Hypo1 ) If BNF auctions above 17442 then it should attempt to move to 17551 and 17615. Sl for this view is 17340
Hypo 2 ) If BNF auctions below 17340 then it should drop to 17216 and 17042 . Sl for this view is 17445 |