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 Thursday, Banknifty opened inside previous day’s range sellers moved the prices below PDL in the start. But there was a missing follow through on downside and due to which buyers took advantage of sellers exhaustion and moved prices up forming a NVD on upside. and closing just below VWAP levels. We have expected this sideways move in case sellers fail to give a follow through on downside. Now, things have become somewhat uncertain and we can witness this uncertainty for some more days. Please see Nifty analysis for today where I have explained what I interpret from this movement. I feel in Banknifty also, this is the time to stay out and let Market give us further directional clarity.
What can be expected now:
Today is last trading day of November and there is a long weekend upcoming. So, we can expect less participation mostly resulting in a sideways move or a small move. In case of less participation , there is a good chance or sharp up and down moves hitting stop losses, so it is better to stay out of markets for today
Trade plan for today:
I am not looking for any trade in Banknifty today. As of now , it looks like we are stuck in a sideway range and if we do not move up soon, it will look to me as a classical distribution pattern. But we need to observe price action for some more days before confirming our theory.
- Sometimes, its better not to trade. I feel today is one such day.
- Long weekend, so chances of a gap up or gap down open on Tuesday are high. So, don’t carry overnight risks.
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