Pre-Market Analysis: Nifty Future – 29th Sept 2020

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On Monday, Nifty opened just above PDH (previous day’s high) and without even testing PDH (previous day’s high), it went above forming a NVD (Normal variation day) to upside. Entire day bulls were in control and there were no signs of bears trying to protect which was unexpected for me but we have formed a P shaped profile which shows that bulls seem to be exhausted in later part of the day and we need a follow through from bulls on the upside to confirm that they are still in control, otherwise sellers might take this opportunity to take control and move prices down. We are now at top of a 450 points rally in Nifty in just two days which is not normal and back to the zone where breakdown happened. Though we might move up again today due to this momentum, we need to watch trade facilitation by buyers carefully as Markets rarely move in a single line.

What can be expected now:

In both Nifty and Banknifty, Buyers seems to be in control for now and we are now at a crucial levels in both indicates after a big two days rally as buyers would now be challenging the higher timeframe sellers as we are back to the level from which this breakdown started. In case buyers are above to move higher again today with conviction, this rally might sustain for some more days and might also take out the top but if sellers are able to defend the prices and move prices back inside previous day’s range, this will not be good for buyers. So, PDH level (11248) and single print zone (11330-11390) is very important today and we need to watch price auction at that level carefully.

Trade plan for today:

I do not have any plan to trade open auction as I do not have much clarity. Even if prices move up today, I am okay to miss it. I will not be looking at any short trade unless prices trade above PDH (previous day’s high) as I am not comfortable trading against the trend. Only in case prices are accepted back inside previous day’s range, I will look for a short trade. Only in case prices get rejected above PDH and are accepted back into range, then I might look for short trade. Later, I will decide my view based on IB range (Initial Balance) and IB placement.

Some cautions:

  1. After huge rally in both Nifty and Bank nifty for last two days, we are back to levels from where breakdown started, so these levels are crucial. So, it better to wait for some more price action to decide if bulls are in control or bears.

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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