Double Inside

I tweeted a while earlier on my twitter handle-

This was posted in the trading room earlier today- [09:14] Shai : 2 ref points today- 4737 a pull back low- mkt is negative below it & 4794 a previous HVN- mkt is positive above it. Rolled over over for tom's session :)  

 

Both my levels were missed by 3 points either side.

 

The chart above shows the two reference levels.

Following the trend day on Tuesday, we have put in two days, both within the range of the trend day.

On trend days we look out for pull back lows which is an afternoon adjustment of inventory. This usuly takes place around 1- 1.30 pm and is a good reference level for future auctions. Following the trend day the market is expected to be positive if this one level holds.This pull back low from Tuesday was 4738.

Yesterday's low in the NF was 4737 and today's low was 4740. In both cases we saw buying interest coming near this level as the buyer tried to shore up the index.

However we are also seeing that this particular buyer wasn't strong enough to take out the previous high volume node of 4794 ( shown as brown dotted line in the chart above) 

So we had an interesting dilemma at the start of the session yesterday and even today- Which of these two levels would give way..

Interestingly today- none did setting up an inside day where the best strategy is to trade on exit of value and range.

Use 4737 and 4794 as reference points for the auction tomorrow.

Whilst the Nifty has done nothing over the past two days, the BN has tried to edge higher.

Notice value being created higher . I did speak about a move over 8450 reaching the high volume node of 8575 ( It made it to 8520)  in the chart, but the afternoon sell off below 8450 made it to the day lows and the subsequent re-test of 8450 was rejected between 3- 3.20.

It sets it up nicely for the activity tomorrow. Bias is neutral heading into the open tomorrow . If you wait for the market to come to you and your levels, you will have a successful day out tomorrow.