Observation from previous day:
On Tuesday, Bank-nifty opened inside previous day’s range and responsive buyers tried to take prices up but got rejected at previous day’s VWAP. The responsive sellers entered at VWAP took the prices to IB low (Initial balance) where they got rejected and responsive buying again took prices back to IB high (Initial balance) and there after Bank-nifty moved sideways forming a non-trend day and also an inside day. Now, there was no initiative buying or selling and entire price action in the previous day looks like responsive activity, so Until a higher time-frame intervenes, this struggle between short term buyers and sellers might go on. We will get a higher time-frame confirmation only through initiative activity today , that is if prices move above PDH (previous day’s high) or below PDL (previous day’s low).
What can be expected now:
There were two attempts by the responsive buyers to cross VWAP of Monday and both the attempts failed, so till the prices get comfortably accepted above PDH (previous day’s high) , which is also the VWAP of Monday. I am having sideways to bearish view on Bank-nifty. I will drop this view only if prices get accepted above PDH (previous day’s high).
Trade plan for today:
Bank-nifty is expected to open inside previous day’s range and the best place to enter a short trade would be rejection from PDH (previous day’s high), So, I would be looking out for that. If bank-nifty starts to move sideways, then I would wait for IB (Initial Balance) completion to get further clarity on bank-nifty.
- In spite of me having Bearish view, I will not opt for any short trade if prices are accepted above PDH (previous day high).
- Same analysis also applies to Nifty also and we need to observe Nifty to see if it is in sync with Bank-nifty or not.
- There is a possibility of sideways movement also inside previous day’s range.
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, Bank-nifty in above statements Indicate Bank-nifty future for current month and not Bank-nifty index.