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 Monday, Bank Nifty opened above previous day’s range but sellers took the prices back inside range. The indicated that Initiative buying was missing in Banknifty and confirmed that we are either moving down or sideways. there were higher chances of sideways move as this down move from last days was result of buyer’s exhaustion and not sellers rejection. Responsive sellers took the prices further down below IB low but they met responsive buyers at around POC and then prices moved sideways forming an Normal distribution or a non-trend day.
What can be expected now:
Unlike Nifty, there was a clear rejection above PDH yesterday which means sellers are strong in that area, So PDH becomes a crucial level and we can see a struggle again at those levels. In case of acceptance above PDH, we can see a good up move in Banknifty. Acceptance inside previous day’s range would mean another sideways consolidation.
Trade plan for today:
Bank Nifty is expected to open inside range and open auction trade in Banknifty is always risky. Further, there is selling interest at PDH, so prices can be volatile in that area triggering both side stop losses. So, I will ignore open auction trades in banknifty. Later if Banknifty is accepted above PDH, I will look for a long trade. No short trades in banknifty till it trades below PDL.
- No short trades above PDH or even above PDL.
- We are still in uptrend on higher timeframe and it is not a good idea to trade against the trend.
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