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, POC: Point of control
Observation from previous day:
On Thursday, Nifty opened inside previous day’s range and moved sideways for entire day forming a NVD downside with a normal distribution curve and and inside day (Inside bar on daily charts). This sideways move can be on account of weekly expiry and it also demonstrates buyers exhaustion. So, we can expect an inventory adjustment break on downside or a sideway consolidation before prices resuming the uptrend.
What can be expected now:
I am expecting Nifty to move down in case it fails to trade above PDH. On daily charts, we are still in uptrend and a retracement or sideways consolidation is always good for the uptrend. II will not look for any short trades if prices are accepted above the poor high (poor high above PDH) and in case prices are accepted inside previous day’s range, I am keen on looking for a mean reversal short trade today. Below PDL , we can look to test levels of 12575 and then 12545, 12440.
Trade plan for today:
Nifty is expected to open inside range and I will look for a rejection at POC levels of 12695 for taking a shot trade at open auction. In case, there is a rejection, prices should quickly move below PDL and then should not come back inside range. I am not looking to short at open if prices are accepted above POC and in that case, I will look for rejection at PDH or poor high for taking a responsive short trade. No short trades, if prices are accepted above 12775 levels.
- No short trades if prices shows a breakout above 12775 levels.
- Thursday was a consolidation, so price action above of below the previous day’s range is very important for further direction.
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