NF shown sign of exhaustion in last session with neutral day auction. If buyers are committed then expected them to accept above 17890 for rally higher. NF opened above 17890 and left buying tail and had a move higher in a sluggish way to close at high. Above 17940 probe was for 17995/18025 which happened in first session then later from short covering profile got a spike to close at high.
Pointers from the day :
NF negated FA at 17945 left in last session.Lack of supply.
Have been mentioning that NF leaving poor value area and risk is attached with long side and mean reversion could take place.NF made another sluggish session today.As have been mentioning in commentary today, no change from this view of mean reversion and balance than rally further.
We got higher volume in first session but the move from 17940 to close at 18050 got lesser volume and this entire move was with mechanical supports.And, another poor value area with anomaly zones.Its third day in a row with poor value area.So, all this info suggesting more risk to long side.
Its ok to have poor value areas and still move higher but that would be like today's auction only, kind of slow auction low volume sessions..Till buyers complete their auction they may sustain like this but could not move much higher with such poor structure behind..Weekly obj above 17920 is marked for 18100-18150 zone..Now,buyers need to defend 17930-17950 to get there else we could look for repair of last 2 sessions profile zones.
It was spike close..Spike rules apply for next session. 18024-18058 spike zone. Stay in spike = bullish ; accept above spike = quite bullish ; stay below spike zone = weakness.
For next session above 18080 could get 18115 if sustains then 18140/18170-18190 possible.Failing to stay below 17940 and back above 17980 could get 18015/18040/18070.
If fails to stay above 18070 and moves below 18010 could test 17985 and weak below 17985 for 17950/17905-17885 if sustains then 17850-17835 possible. Further weak below 17825 for 17800-17790 and quite weak below 17785 for 17755/17725-17710.
Charts and data :
Detailed plan with references to carry forward, actionable trade hypos for next session, any importance nuance from the day and view based on weekly and monthly time frame are available to members in private blog.Above report is only part of it.
Notes :
a) Check glossary page in website if any of the terms used in the post are not clear.
b) If images are not clear, click on them for enlarged view.
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