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

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Observation from previous day:

On Wednesday, Nifty opened inside previous day’s range and buyers tried to take is above PDH (previous day’s high) but failed. There after, sellers took control and pushed the prices below PDL forming a trend down day. This down move was unexpected and as I said in the previous post, prices testing PDL (previous day’s low) again is not good sign for buyers and we might have a digger inventory adjustment break if prices move further down below PDL (previous day’s low).

What can be expected now:

I have a bearish view on Nifty if prices are accepted below PDL (previous day’s low) and sideways to bullish view in Nifty if prices fail to break PDL (previous day’s low). So, previous day’s low is an important level to watch for. There is no point going for a long trade below PDL(previous day’s low) and even though today is expiry, the fall below PDL (previous day’s low) can be big with lot of volatility.

Trade plan for today:

Nifty is expected to open below previous day’s range and I am planning to take a short trade at open only if prices get rejected at PDL (previous day’s low). In case of a gap open, i will wait for prices to settle down for sometime and then observe the acceptance of prices before taking a trade. Also, today is expiry, so usually prices should be in range but looking at the volatility, it does not look like it will be a sideways expiry.

Some cautions:

  1. Today is expiry which might add to the volatility in later part of the day.
  2. No long trade below PDL (previous day’s low) as we do not try to catch a falling knife.

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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