After the big break last week from the consolidation pattern and the big price move, we have some changes in the targets in Nifty and bankNifty over the short to medium term.
This is because we have longer term players who have entered in the past 4 sessions to take the market away from it’s recent 4 month range.
Using our core principles of vwap and profile, let’s see what the charts are telling us
First the background chart :
The Nifty started building this composite chart from OCT last year.
It was done roughly between 6336- 5968 on spot prices.
There was an attempt to break higher in DEC which did not find new buyers, then the profile rotated lower in January to find sellers as it tested the lower extremes over a few sessions.
In Mid FEB price moved back into the value area marked in purple and early last week we had a successful break above the 6336 level which yielded 200 points in the same weekly close as larger OTF came in this time.
We believe any dips to 6336 spot ( +/- 40 points) either side are buying opportunities for the medium term with a fixed price target of 6673- 6702 and possible 7072.
Here is a simple chart which shows the expected target price of the move above VAH and Range high.
This is a daily chart showing vwap for the rise from March 09 when the entire world entered a new bull phase.
The upper end is at 6673 currently and as we know the 2SD bands reject price moves above it by a factor of 5%.
So the upper estimate sits near 6700 spot or roughly 200 points higher from Friday close.
A similar chart of the BN spot projects 13681 as an upper 2SD line.
However that is a higher estimate .
The previous swing highs of BN are at 12200 spot.
We expect the current upmove of the BN to face resistance at 12160- 12216 spot where the reaction could signal whether the move should continue or reverse.
Support on the BN spot for the short term is 11736 spot followed by 11236 spot on a 30 minute closing basis.
Since BN has led this upmove we should carefully watch how it plays the 11736- 12216 zone as it could signal the next big move.