Pre-Market Analysis: Nifty Future – 28th Aug 2020

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Observation from previous day:

On Thursday, Nifty opened with a gap up above previous day’s range but there was not much conviction by the buyers and prices struggled to move above IB high (Initial balance). After, midday, sellers tried to take the prices inside previous day’s range but failed and Finally prices closed just above PDH (previous day’s high) forming a NVD (normal variation day) down day but more like a non-trend day. The trade facilitation by buyers was poor and if this poor buying continues today also, we might see sellers taking advantage of this situation.

What can be expected now:

There is not much clarity in the markets now. We have prices in both nifty and bank-nifty giving acceptance above Swing high on daily charts but trade facilitation is not good. So, I would like to have a bullish view till prices trade above previous day’s range but my view will turn sideways or bearish if prices trade inside or below previous day’s range.

Trade plan for today:

There is no clarity at open auction today. Prices are expected to Open near or above PDH (previous day’s high)and we might see some buying but going long in nifty at this point of time is risky unless we start to see a good trade facilitation. In case of any rejection above PDH (previous day’s high), I would be looking for a short trade but with a strict stop-loss and that too only in case of poor trade facilitation on upside by buyers. Virgin POC (point of control) at 11480 can be a good target for short trades below PDL (previous day’s low).

Some cautions:

  1. Nifty is in an uncertain zone. So any thing can happen. One of the best ways is to sit out and watch.
  2. I will also be careful with my trades and will take less position size in case of any trade.
  3. Bank-nifty and Nifty in sync will give you trade confirmation. Better to avoid trades if they are not in sync.

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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