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

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On Tuesday, Nifty opened just above PDH (previous day’s high) but could not sustain above PDH and prices came back inside previous day’s range. However, sellers also failed to dominate and even though Nifty formed NVD to downside, there was a lot of struggle between buyers and sellers for control in Nifty which resulted in a Normal distribution and value area moving slightly upside. So, there is again not much clarity on Nifty but if buyers are able to break PDH and prices get accepted above PDH, they can be in control of Nifty. Similarly. a break below PDL will mean sellers are dominating but till now, sellers have show no sign of strength, so they need to act decisively otherwise buyers might trap them.

What can be expected now:

We need a confirmation after yesterday’s move and see what smart money was doing yesterday. A follow through on upside or downside of yesterday’s range will give us confirmation. This struggle might continue if prices trade inside previous day’s range.

Trade plan for today:

I am expecting Nifty to open inside previous day’s range and I do not have clarity on open auction trade, but I would be looking for mean reversion trades at PDH only if there is a clear rejection (short trade at rejection above previous day’s high). Also, sellers are not in control and there is no clarity unless they take prices below PDL, so we need to be careful with any short trades. Later today, If price is accepted above PDH, I will look for long trade and If prices accept below PDL, then I will look for a short trade.

Some cautions:

  1. Today is last day of month, so there might be some volatility due to fund adjustments.
  2. For any directional move, Nifty and Banknifty should be in sync, If there is a discord, then we can ignore the trades.

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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