As expected, Thursday was perfectly followed by a new vertical move on Friday, with spot Nifty and March futures achieving our target and closing at the day’s high on a perfect trend day. The trend day or one directional move has put the market in a new orbit and hence once should see a fresh up move in the Nifty from Monday.
Trend days occur infrequently, but when they do, they usually involve a greater percentage of other time frame traders than day traders. No wonder market picture had a very narrow initial balance (IB) range (5,571-5,590) and volume in that area dropped to 20 per cent.
The market undercurrent remained positive as Nifty closed above the value area of the day. The trade summary matrix (TSM) data suggest short covering in value area and also IB range. The short positions got covered when the Nifty March futures started convincingly above 5,600. The Nifty futures also saw significantly higher volume, almost 65 per cent above the point of control, area of most traded price. Interestingly, the trading activity today suggest initiative buying as location of value area (5,580-5,660) today was wholly above the previous day’s value area.
The futures closed at a 26-point premium to spot and shed almost 3 million shares in OI during the intraday trade indicating short covering and involvement of other time frame traders. The price projection using time price opportunities (TPOs) and volume picture chart suggest a target of 5,705 and support at 5,577.
The volume-based upside after the initial balance period is expected to take the Nifty futures around 5,785, the volume picture chart suggest. The spot Nifty is likely to move up around 5,737 and is expected to get support at 5,560. The Bank Nifty is expected to move up around 11,690 and get support around 11,000.
