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 Wednesday, Banknifty opened inside previous day’s range and buyers failed to take prices above PDH and sellers pushed the prices below previous day’s range forming a Trend down day in Banknifty. there was some recovery in last which pushed prices back into previous day’s range. All this price action was in sideways zone, so nothing much can be inferred from it except that there is pending business in this zone and prices are likely to stay sideways if big money is not interested in pushing prices up or down.
What can be expected now:
Above previous day’s range, poor high at 30200 levels and poor lows at 28900 levels are the levels to watch for. Until we break above this range, the prices will mostly move sideways with no clarity and these types of sideways moves are used by smart money to establish their positions. Though, it makes more sense for them to distribute at these levels rather than re-accumulation, we will have confirmation and clarity only when a follow through happens and that can take some time. Till then, It is a good idea to trade extremes.
Trade plan for today:
I have no clarity at open auction. Also, today is expiry, so there are higher chances of sideways price action is there is no initiative activity at open. IN case of sideways move, it is always a good idea to trade extremes.
- We are moving in sideways range for now an this is the most boring phase of markets. Also, a phase where intraday traders lose most of their money, so be cautious.
- Only a decisive break above of below will set the next 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