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 Monday, Nifty opened inside previous day’s range near PDH and buyers tried to take proces above at open with initiative buying but failed. Thereafter, prices trades inside range with a sideways moving with a slight range extension below IB low forming a NVD day on downside. There was an attempt of sellers to mark prices down but that also failed and finally prices closed near to the level where market started giving us indication that no one – Buyers or sellers were from higher timeframes. NOw this indicates pending business in this area and might continue with a sideway move again if we do not break above PDH.
What can be expected now:
There was a rejection yesterday at the highs but sellers failed to give a follow through to downside. So basically, nothing changed in the sentiments and we need to see acceptance above PDH or below PDL for a move in that direction. SO, until we trade inside this range, we are likely so see and sideways volatile market which would be tough to trade for Intraday directional traders like me.
Trade plan for today:
Nifty is expected to open inside previous day’s range and there is not clarity at open auction. Since, I have a sideways to bullish view , I will look for sellers exhaustion to get into long trade but only if prices accept clearly above PDH or there is any clear rejection from range lows (PDL or IB low). wnssing sharp down moved by shorters from few day and no follow through there after, so these moves are from smaller timeframe smart money and I am not very comfortable with short trades now till we see a clear conviction from sellers.
- No short above PDH and no long trades below PDH – thumb rule.
- In case of now clarity or much volatility, its better to stay out and watch the action than to jump in the battle and take a hit.
- In case prices stay inside previous day’s range, there are more chances of a sideways move.
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.