Inventory adjustment occurs especially when the market participants goes too long or too short. Short term Inventory Adjustment will be realized in the market either in the form of short covering or long liquidation breaks. Understanding the Long Term, Short Term, Day timeframe inventory conditions will give the true edge from both the trader/investor perspective.
Nifty Futures had done a inventory adjustment in a steep slope on last Wednesday trading. It is more of short sellers day where an emotional short selling is witnessed in the second half of the session. Indicator sentiment remains positive for the 7th day. Nifty Futures on the Daily chart is trading above 50 day moving average 9960.
Nifty managed to find support around 9700 zone and indicator sentiment turned positive on last friday evening. However profile sentiment manages to be negative as long as the price stays below 9814. Price accepting above 9814 could bring short some bullish bias back into the markets until then a sideways action between 9700-9814 is expected.
On Fridays trading session price opened lower though the trading sentiment on Fridays trading session is positive price maintained to close below thursdays pullback low reference. Value formed lower to overlapping and trading sentiment turned to negative despite one timeframing higher for 5 consecutive trading sessions on Daily timeframe.
Volume profile is a key study when comes to understanding the auction trading process. Volume Profiles will show you exactly how much volume, as well as relative volume, occurred at each price as well as the exact number of contracts for the entire session. It is a visualization tool to understand the high activity zone and low activity zone.
On Mondays trading session price is able to find a new higher equilibrium compare to the Fridays session as value is created higher and market sentiment too revived to positive mode despite Fridays negative close. Entire June trading session is so far in a compressed 100 point trading range between 9600-9700.
On Mondays trading session price is able to accept below the Spike base which we discussed on last preparation. Price was trading around the days open most of the time and also price was moving back and forth around the prev week low which is not a sign of high confidence selling on mondays trading session. Finally price manage to close above prev week low (9619.5).
Video log on how to prepare for 12th June 2017 Nifty future trading. Here is the quick summary of what is discussed in the video. From the Top down analysis monthly timeframe is up and trending higher not much weakness seen, weekly timeframe is up (sentiment is up as well) and also week range is very thin 85point range. However daly timeframe is in balancing mode for last 6 trading sessions as the volatility in the markets remains low.
On the Monthly charts – Trend is up and one timeframing for the last 5 trading months. Weekly timeframe trend is up and onetimeframing for last four trading weeks . And on the daily charts Bank nifty futures is in one-timeframing mode for the last 10 trading sessions. so ideally all the timeframes are up and clearly momentum traders in control in the market.
Nifty Futures closed at all time high on Thursdays trading session. However still the overall market is in short term balance between 9300-9380 range since 26th Apr 2017 and consolidating for the last 6 trading sessions. Nothing much changed from the last top down analysis on nifty futures. Volatility in the market remains muted and banknifty is outperforming nifty future heavily in the past few trading sessions.
Nifty Futures on the monthly charts one timeframing for the last 5 trading months with all time high at 9366. Intermediate trend is up as well with less rotation seen so far on the weekly timeframe. On the Daily Charts markets are moving in a layered consolidation with indicates a weak market structure and the volatility for the Indian Market stood at 11.44 as on 2nd May. Increasing volatility is the only key for better trading opportunities in the upcoming trading sessions.
On the Monthly charts – Trend is up and one timeframing for the last 5 trading months. Weekly timeframe trend is up and also got out of the 3 week balance and also onetimeframing for last three trading sessions. And on the daily charts Bank nifty futures is in one-timeframing mode for the last 6 trading sessions.