Observation from previous day:
On Wednesday, Nifty opened inside previous day’s range and formed an inside day with sideways value area. So, nothing much changes in Nifty from Tuesday’s analysis (please do read that also if you have not (https://onerighttrade.com/index.php/2020/09/02/pre-market-analysis-nifty-future-2nd-sept-2020/). Though, NIfty Broke above IB high and formed a NVD (normal variation day) up day but buyers were not able to take prices above PDH. So, it becomes important to see if there is a follow through to upside today or sellers pitch in above PDH and we get a failed auction and start moving downwards.
What can be expected now:
The entire move on Wednesday was sideways. This sideways move can continue today also unless we break either PDH (previous day high) or PDL (previous day’s low) and get acceptance beyond it. I have a sideways to bearish view on Nifty if prices fail to trade above PDH (previous day high). Also, If prices are accepted below PDL, the fall can get more severe. But having said all this, PDH (previous day high) is an important level to watch for and I will not opt for a short trade above PDH (previous day high). I will not be looking for a long trade and am okay to miss any good move on long side.
Trade plan for today:
Nifty is expected to open inside previous day’s range and there is not much clarity in open auction, but I will be looking for a short trade at rejection of PDH (previous day high) or break of PDL (previous day low) if any of that happens. If prices, start moving sideways, then I will wait for IB (Initial balance- first 1 hour range) range to form and then will try to get into a good short position.
- 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 bank-nifty, So, there will be good chances of trade success if Bank-nifty is in sync with Nifty.
- Today is expiry, so, there is a possibility of sideways movement also inside previous day’s range or may be a volatile move towards the end.
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.