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 above PDH with a gap up but Gap did not sustained. Also sellers tried to push prices down but there was a responsive buying at lower levels and prices closed sideways forming a NVD down day. If we look at last few days, this was oine more day of sideways move. inside 30300-30900 range, So we have not clarity yet on this and this sideways move can continue further if we do not break beyond this range decisively.
What can be expected now:
Banknifty is in sideways move and price acceptance above 30900 or below 30300 can give a move in that direction. Above 30900, 31100-31300 is the level to look out for as I expect higher timeframe sellers might enter in this zone. There is no clear rejection at higher levels, so most probably before a substantial down move, smart money will test for any pending business beyond highs. Today is expiry, so there are chances of Banknifty remaining sideways if it starts accepting sideways.
Trade plan for today:
Banknifty is expected to open inside previous day’s range and I do not have clarity at open auction, So i will observe where prices are getting accepted. I will look for a long trade above PDH and a short trade below PDL but in case prices accept inside previous day’s range, I will look for a rejection at extremes to take a mean reversion trade also. Today is weekly expiry, so prices might remain sideways but for that we need to make sure they are not one timeframing on any side.
- No shorting above PDH and no longs below PDL.
- Banknifty can be more volatile today and it would be a good idea to stay out of Banknifty until we have very clear and good entry.
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