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 Wednesday, Nifty opened inside previous day’s range and there was a poor trade facilitation by both buyers and sellers and price trades in a narrow range for sometime before making a down move which was bough on by buyers and prices closed near PDH. This was another day of sideways move overall and all the price action was overlapping previous day’s range. SO, we do not have clarity yet and same thought applies from yesterday, that is- “Buyers need a strong up move with good trade facilitation to move further up and any poor trade facilitation on upside might not be good for buyers”. As of now, it seems there is pending business in this sideways zone.
What can be expected now:
Same as yesterday, the last up move looks like a buying which more or less due to absence of sellers and not due to strength of buyers. . Smart money might be distributing (or reaccumulating) and they will move markets down (or up) only once distribution (re accumulation) is complete. Till that is done, we might stay in sideways zone. But having said that, we need to be very careful with any short trade opposite to the direction of trend and better to avoid until we have a very good opportunity.
Trade plan for today:
Nifty is expected to open near PDH will wait to see if prices are accepted or rejected PDH. Today is also expiry, so we need to be cautious. I will be positively biased if prices are accepted above PDH and will have a negative view if prices are rejected above PDH and trade back inside previous day’s range.
- Today is expiry, so if buyers fail to break above previous day’s range, a sideways non-trend day can be expected.
- Banknifty and Nifty both are moving sideways and Banknifty is showing more weakness, so for any substantial upmove in Nifty, Banknifty also has to show strength.
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.