Nifty & Bank Nifty Spot Week Composite Market Profile for the week ended 07-08-2015
Nifty Spot opened at 8513.85 on 03-08-2015, above the Week Composite value area of the previous week & traded above the highs of previous week but closed just below the highs. It found sellers on Tuesday & pushed towards the demand zone of 8450 only to recover towards the end of the day. On Wednesday, it opened gap up & auctioned towards 8600 & continued to consolidate in a tight range to finally close the week at 8564.60, below the developing WPOC.
In the coming week, if the Index stays with the value area, it may consolidate further in the same range. If it manages to stay above 8595 & negotiate the sellers above PWH, it can auction towards 8650-8665 which is a supply level for the week & may offer resistance. If the Index auctions below 8530, it will drop down to find buyers in 8450-8480 range & a failure to bounce back may push it further down towards 8400 & later 8360, though we feel that its very unlikely to auction below 8450. A push above 8665 with a positive order flow & acceptance above the same will set a move towards 8705 & 8745.
Below is the Weekly Composite Market Profile Chart for Nifty Spot.
Bank Nifty Spot opened at 18782.70 on 03-08-2015, above the WCVAH & pushed above the previous week’s high & managed to close above the same. On Tuesday, RBI policy made it go wild, initially meeting sellers & later responsive buyers pushing it upwards to close near the highs of the day. It consolidated in a range of 300 points for the rest of the week & closed at 18893.55, just above the previous week’s high & above the developing WPOC. We have a textbook Gaussian Profile with a balance distribution.
If the index manages to find acceptance above 19010, it can auction towards 19070 & later towards the supply zone of 19255-19335. Acceptance above 18335 can auction it upwards towards 19500 & later 19590. A failure to hold 18850 & acceptance below the same can push it down towards 18755 & later 18655 where it may find buyers. Acceptance below 18650 can make it weak & will not be surprised to even see 18450-18300 levels.
Below is the Weekly Composite Market Profile Chart for Bank Nifty Spot.
Note : When we refer to Demand Zone, Non Directional Negotiation Zone & Supply zone ; we mean to refer to the prior established balances established either on intra-day time frame or on a daily time frame. The essence of Market Profile is to watch out for Micro Composites & Auction acceptance & rejection in those balances. Its not a definite rule to watch for a Daily, Weekly or a Monthly Profile as market is dynamic & the auction may be doing some important activity during the day which cannot be seen on a Daily Profile. The intention of posting these charts is to have a general overview of the Supports & Resistances.