Pre-Market Analysis: Nifty Future – 30th July 2020

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Observation from previous day:

On Wednesday, Nifty opened inside range and as we expected , it attempted to cross PDH (previous day’s high) at the open but this attempt failed. Please note that we were bullish on nifty if it sustained above PDH (previous day’s high) and had a sideways view if price traded inside range (prev post: https://onerighttrade.com/index.php/2020/07/29/pre-market-analysis-nifty-future-29th-july-2020/). Nifty after failing to trade above PDH (previous day’s high) in open auction, then consolidated in the upper zone of previous day’s range and later came down to test the HVN (High Volume node) , thus forming a NVD (Normal Variation day) on downside. Though , it looks easy to be in short trade after the event is over but we suggested not to go short based on risk and low RR , a short trade carries. Anyway, today’s analysis is interesting. Bulls did not managed to take prices up but bears also were not able to take prices below previous day’s range. Also value area is formed on upside (see chart on the main page of website for value area placements). So, I am still bullish on Nifty if prices manage to trade above PDL (previous day’s low).

What can be expected today:

We can expect nifty to open within today’s range and PDL (previous day’s low) becomes very important today. Today’s late fall looked like due to bulls exhaustion and we will get that confirmation today only if sellers fail to take prices below PDL (previous day’s low). Therefore, I have a sideways to bullish opinion for today and I will reconsider my view only if prices are accepted below PDL (previous day’s low). On upside, 10415 is an important level to watch.

Trade plan for today:

Open auction does not have any clarity. Later, I will only be looking for long trade if prices are accepted inside previous day’s range and no short trade. We can look for short trades only below PDL (previous day’s low), but again as i warned yesterday also, short trades carries a larger risk and less RR (risk to reward), so its advisable not to look for short trades unless you are scalper (I am not good at scalping and my personal opinion is against it !! ). 11070 and 11415 are the important levels beyond yesterday’s range and 11295 (POC- point of control) is important level inside yesterday’s range, so watch for price action at these levels.

Some cautions:

  1. Even though Nifty looked weak yesterday, please note that value area is formed upside and the markdown later yesterday could be inventory adjustment, but don’t try to jump ahead of markets. We will get confirmation of this only if prices come back above 11300 levels.
  2. Bank-nifty was little stronger than nifty yesterday after so many day’s of weakness. So a strength in BNF will pull nifty up.
  3. We can be entirely wrong but we will not look for any short trades until prices are accepted below PDL (previous day’s low). but even below PDL (previous day’s low), short trades will be risky and a support is seen at 11060 levels.
  4. Today is expiry, so please note that a sideways move will be in best interest of option writers but if nifty continue to move sideways in upper zone of yesterday’s range, then bulls might try to take prices upside towards the end.

Disclaimer:

Please note that this is a personal view for learning , observational and education purpose and is not a trading recommendation. Trading futures carry a risk, so you should consult a financial expert before taking any risk. Also, Nifty in above statements Indicate Nifty future for current month and not Nifty index.

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