Notes from V2

Every evening, we go through charts with our market profile tools and analyze the markets for regions of demand and supply.

We keep 5 charts in the trading room : Nifty, Bank Nifty, RIL, LT and SBI.

Every night an update is sent to prepare the trading room for next day's major moves.

Here is a sample post from Friday's close

Bank Nifty Futures :

- 11580 had the largest volumes and the region of 11580/ 11625 will resist all up moves
- below 11450, Bn can see 11366 and if that does not hold then 11280/250.

Update at 11.30 :

- High of 11588 and low of 11290.

Nifty Futures :

- Large volumes at 5760 and 5794
- above 5795, NF can move to 5823
- below 5764, lows of 5733 and 5702/14 can be seen again.
- a close above 5827 will pit NF on track for a 120 point moves to bal highs at 5948
- a close below 5714 will bring 5630/ 5570 next.

Update at 11.30 :

- High of 5790 and low of 5730.

SBI Fut :

- The inside days have set up a powerful move in sbi and re-entry into a prev bal zone.
- Large volumes visible below prev support of 2850
-2772 and 2722 are supports on way down.


Update at 11.30 :

- low of 2727 made.

RIL :

- RIL formed an inside day around HVN of 976.
- 971 forms the lower extreme, below which it will vist 956.
- above 988, 999/ 1004 are possible.

Update at 11.30 :

- High of 985 and low of 974.( still inside)

LT :

- Like SBI, LT had an inside day and broke supports this week.
- large volumes visible at 1605.
- below 1596, 1582/ 1567 are possible.

Update at 11.30 :

- low of 1569 made.

SBI

At Vtrender we are firm believers in inter market and intra market relationships between stocks, currencies, commodities and the like.

Within an index also we keep looking for symmetry( to use a Market profile term) or the co-relation between indices to get an edge to benefit our trading.

It is a well-known fact that the BankNifty leads the Nifty up and down, a fact we have been pointing out over the past one year. But today we have to look at one of the major generals of the army, to get an idea of how the broader market will perform over the shorter term.

Our leader of the lead index ( Bank Nifty) is of course SBI.

One need not look much beyond the last Mahurat session in early November and the SBI price of 3500 printed that day. It need not be stressed that the index never saw 6335 after that day.

So whilst SBI came off a whopping 1000 points, the Nifty followed. The army always follows a general.

That's in the past, we now come to the present and see what SBI has been doing recently.

Here's a composite profile of the SBI futures :



Earlier on friday morning , when we were watching for signs of acceptance in the Nifty futures below the 5200 level, we had one eye on SBI which had formed a "b" shaped profile the previous day. In Profile a b shaped pattern on the charts is often an indication of shorts covering.Also the lows of friday were the same spot from where SBI had done a jump of 250 points in 4 sessions previously in Jan.So the level had it's importance clearly marked.

The composite profile completes the rest of the story.

The 'b' shape was confirmed friday as well and this morning the profile accepted the activity on friday and closed at the upper end of the bracket below the important 2706 zone.

Coincidentally the Nifty future closed around 5445 levels, an important reference level for us for the next 125-150 points.

Tomorrow we will watch SBI again to see if it can once again show the way.

OrderFlow SBIN & RELIANCE

Here are the OrderFlow charts for SBI and Reliance futures.

Over the week, we did some tweaking with our code and the final result is produced below.

SBI :



Reliance :



An adamant pixels/bar in the platform prevents me from displaying more data than this on screen.

It was interesting to note that the sell-off from 5560 levels was matched in all the 4 orderflow charts yesterday.