Last week we spoke about a test of 7950 spot. The index tested the zone late Thursday and Friday eventually closing near it leaving the immediate 120 points uncertain. Whilst there is an event over the weekend which may dictate Monday Open prices, we are looking for an auction sustaining 8030 spot early in the week, for bulls to attempt a pullback. Even then higher levels near 8080- 8110 may attract selling. Lower down the destination trade for the auction is 7830spot as long as it stays below 8110 spot.
Last week’s report can be assessed here: http://vtrender.com/nifty-bn-weekly-view-spot-for-02-nov-06-nov15/
Nifty TPO chart:
Following the neutral extreme of last Friday, Monday opened lower and trended lower till we got emotional buyers at 8000 who took the index higher into the close. Tuesday opened higher but saw sellers and was a normal variation day. Wednesday opened even higher that Tuesday but this time the sellers were more aggressive with a trend day close at lows. Thursday the auction continues lower in another trend move and Friday we were testing thurs lows and the weekly support in a normal variation type.
The chart above is annotated and shows a second value closing lower. On the weekly TF, we now have value below the 2 weeklies 05- 19 Oct and the trend of expiry week has excess from another composite weekly of 19 Oct.
The Larger time frame has gone weak and we maintain 7830 as the immediate target below 7950 and a possibility of 7645 and 7545 before the Month of November runs out. On the higher side resistance is the broken 8260 and 8330 above.
Limiting ourselves to the possibilities at play in the upcoming week, we see a narrow bullish bias above 8030 which may take the index upto 8072 and 8112 and above 8112 to 8174. We see sellers trying to reestablish short positions if we move to either 8111 or 8173 in the week for the weeks ahead.
Bias below 7904 is for a clean breakdown to 7836 and 7807 in the holiday-shortened week.
BankNifty TPO chart:
The BN chart is annotated and shows the same kind of weakness as pointed above for the Nifty. The BN was in a double distribution last week following the trend down of the previous week.
The positional support in BN is the Sept series vwap of 16770. The buyers are in pain below oct vwap of 17255 spot. We see an HVN at 17400 which looks dominated by aggressive sellers. Also, another round of sellers are there at 17660 as mentioned in last week’s report.
For the week ahead the BN can stage a bounce to 17460 and 17520 if we stay above 17255- 17295.
Support lower is at 16710 and 17530.
We have used quantitative analysis and the principles of Auction market Theory to arrive at our levels. For running updates of the daily and weekly moves and to join our community visit – Vtrender Trading Room