NF printed a neutral center profile on Friday — It first scaled below IB (initial balance = first 50 mins of the day’s range) low, failed to sustain there, and then went on to move above IB high, thus marking a failed auction at low. A failed auction is an auction market theory where price fail to sustain beyond the IB range and get quick acceptance back inside the IB, then go on to scale beyond the other end of the IB. The neutral center profile suggests both buyers and sellers had a tough fight over control of the auction today. Thus, it is crucial for the next session tomorrow that one of them emerge as the winner, i.e., either get a trend up day or trend down day, or else chop around today’s VWAP and POC (point of control) to print an overlap profile next has high odds. Failure to sustain beyond PDH or PDL will attract back to VWAP — POC zone = 21790–21840 is the pivotal zone, respectively.
Important nuances from NC profile →
• Failed Auction (FA) = 21674
• buying Tail = 21674–21711
• Value = 21770(VAL) - 21840(POC) - 21850(VAH)
• VWAP = 21790
In the previous report, it was mentioned that a clean look below 21768 was required as per structure, which was a weak low on Feb 08. NF got that clean look below and marked FA at 21674. This FA, along with buying tail, is now a good reference for buyers to hold and extend higher. Weakness only if it accepts below FA.
As per the higher time frame context, NF had two distinct composite balance profiles. Jan 29-Feb 01 was a four-day composite short covering-P shape balance, and then Feb 02-Feb 07 was a composite 3–1–3 balance, i.e., tail at both ends and balance in between. Now, after the last two days of auction, these two composites are emerging as one large composite balance profile. In this large composite 21890–21960–22010 zone, it roughly requires a fill to create a gaussian bell balance profile.
So for next week - as long as today’s FA and buying tail holds + scaling above 21840 means probe higher is due towards 21890 / 21960 / 22010. This 21960–22010 is good resistance zone to reject. If it accepts above 21960–22010 zone, it is bullish for 22090-120 / 22165 / ATH and more.
If FA at 21674 is taken out straight without any probe above 21960 and further acceptance below 21630, means NF is ready to leave that large composite balance, which could bring solid weakness structure-wise. Quite weak below 21680–630 zone for probe towards 21540 / 21410–380 / 21330 and further weakness if accepts below 21330 for 21180 / 21080 / 21030.
