The markets traded below the balance area of thursday and the value lows but did not show a lot of momentum or new sellers below the Open price of Friday.
The result left the markets as another 3-1-3 with minor excess at the extremes of the session as OTF stayed away after the gap down.
In our last trading plan report we spoke of the markets having to close below 6800 and 12900 as evidence of the suspension of the UP auction.
The friday close was AT these numbers but not enough to suggest that the market was tilted either way or changing it’s short term mode.
Friday’s auction in the NF and the BNF was below the previous day’s balance and the spike we had noted in the closing hour of thursday in both NF and BNF.
That spike zone was 6852-6810 and in BNF 13144-12935.
Even though we stayed below the previous day’s value area low, what has confused matters in the Friday auction on the bearish side was an inability to trade below the OPEN price.
Accordingly we now see the broader auction as a correction to the rise on wednesday in that it has cleared all the anomalies seen in the auction of 9th April.
Bears will have to break friday lows now for momentum on the downside.
The auctions in NF and the BNF now have the possibility of going through the thursday balance area on the upside and covering the region upto 6861/ 13142 on staying above 12936/ 6810 F.
The only issue would be the vwap of the spike at 6837/ 13057 which is where the sell stops would be located.
Hence buyers are back in total control of the market above 6837/ 13057 F only.
The shortened trading week will also hold buy stops below 6785 and 12860 being the vwaps of last week’s rise.
Both the above levels were defended well in friday’s gap down.
The strategy therefore is still to play the UP auction till the 6785/ 12860 levels hold ( changed from 6800/ 12900).
However good upsides to 6900+ and 13300 + come about only when 6837/ 13057 is crossed convincingly.