BNF opened in the lower quadrant of the previous day's (PD) value area and swiftly descended, momentarily breaching the poor low at 47445 before bouncing back. This "Look Below and Fail" move, as coined by Jim Dalton, often entails clearing the previous day's high. However, the PD featured double distribution with singles at 47950 levels. The subsequent reversal, originating a few ticks below the previous day's Half Back (marked by the white line on the chart), hinted at the involvement of weak hands operating at visual levels.
Following this seller-initiated move, bullish attempts during the E and H periods to break the ongoing OTF down were half-hearted, leading to continued downward movement till the close. As a result, the value area shifted lower, and both the time point of control (TPOC) and volume point of control (VPOC) migrated downwards, albeit with TPOC closing higher than VPOC. This subtle shift hints at the beginning of accumulation.
Since May 3rd, BNF has been primarily experiencing OTF down movements, prompting speculation about whether the inventory is "short to too short." The upcoming trading session will shed light on this question.
On the downside, a singles zone of trapped shorts exists from 47060 to 47185 levels, often serving as a zone where trapped shorts square off their positions by buying, providing price stability and inviting further buying. However, if significant selling pressure is observed, the trapped shorts may remove their bids, leading to a swift decline. Therefore, 47060 and 46800 are crucial support zones to monitor.
On the upside, the first resistance zone is at 47950. Clearing this level could open up targets at 48200 and 48500. With elections, news flow, and overall environment of uncertainty, I will focus on these key zones to take trading cues.
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