Pre-Market Analysis: Banknifty Future – 5th Nov 2020

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Abbreviations I use in the post: PDH: Previous day’s high, PDL: Previous day’s low, IB: Initial Balance or First 1 hour range, NVD: Normal variation day (one of the market profile day types), OTD: open test drive

Observation from previous day:

On TWednesday, Banknifty opened inside previous day’s range and after moving sideways to down for almost entire day, it moved up in the end forming a Neutral center day. On higher timeframe, we have clearly broken out of range and are expected to move higher but price action can be volatile amounting to uncertainty in US elections, as till we have csome clarity, more and more timeframes will be involved actively. As expected in previous post (see- Pre-Market Analysis: Banknifty Future – 4th Nov 2020), I think prices will test 27000+ levels in coming days.

What can be expected now:

I am expecting Banknifty to further move upside but with a volatile prices action. Please remember, the prices moved up does not always mean it was easy trade or even tradeable (contrary to what it looks when you look back at any chart). In case, prices trade inside previous day’s range, we might see an inventory adjustment break to throw out weak buyers in Banknifty.

Trade plan for today:

I do not have any clarity at open. If prices are accepted above PDH, I will look for a long trade later but acceptance of prices inside previous day’s range is not good for long trade.

Some cautions:

  1. Volatility expected and we are in upswing , so at least no shorts for today if prices are trading above previous day’s range..
  2. Watch out what Nifty is doing and we can plan a better trade if both indices are in sync.

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, Bank-nifty in above statements Indicate Bank-nifty future for current month and not Bank-nifty index

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