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 above PDH with a gap up and it consolidated above previous day’s high which shows acceptance at higher levels. In the later part of the day, it moved up above IB high giving IB range extension on upside and forming a NVD up day. If we look at last few days, this was a move above the sideways consolidation but only worry is that the move was small ranged which depicts that buyers are in no hurry to take prices up. Also, Banknifty remained inside sideways range, so we need to be cautious as the higher timeframe selling can start any day but when, no one knows.
What can be expected now:
We need to see if buyers are able to give a follow through on the upside. Inside previous day’s range, POC levels are important and can provide support to the prices. Today is also expiry day, so we need to be cautious as volatility can be expected. I will have a bullish view if prices accept above PDH, sideways view if prices accept inside previous day’s range and bearish view only below PDL.
Trade plan for today:
Nifty 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 short above PDH and no long trades below PDL.
- Today is weekly expiry, so if prices consolidate inside previous day’s range, we have higher chances of remaining sideways.
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.