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 above previous day’s range and moved only sideways throughout the day forming a non-trend day. This was the expectation because of expiry (see prev post – Pre-Market Analysis: Nifty Future – 3rd Dec 2020). I am also expecting market to slowly drift upwards to 13400-13500 levels in coming days from where selling can be expected. The trade facilitation by buyers is poor but it does not make sense to e the trend until market is making new highs and value area is forming on upside.
What can be expected now:
Nifty is expected to move up or drift upwards until some OTF sellers decides to bring prices down. This will usually happen once the distribution (if any) is complete and OTF wants to mark prices down (for any reason). Until that, we can continue drifting upwards and this market will be difficult to trade from both long and short side.
Trade plan for today:
Nifty is expected to open above PDH and I will take a long trade only in case of OTD up at PDH. In case of a gap up open, I will avoid the trade. Also, now a days, it does not make sense to stay long in the trade, so in case prices move in favour, i will try to trail tight of book my positions. Today is also RBI event, so things can be volatile due to the even, so it will not be a bad idea to stay out of markets today till clarity is there.
- Today is RBI event, so expect some volatility.
- Overall, I am expecting prices to move sideways to upside but trading this market would be difficult.
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.