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 Buyers pushed the prices above PDH. Although there was some initial resistance by sellers art PDH, buyers managed to over come that and above PDH, they slowly moved upwards almost one time framing to upside but with a slow movement absorbing all supply. This means that sellers are not active in this region. Although we had NVD to upside, the price action was inside Monday’s broad range. Now, we need to see if sellers can defend the POC (13725 -13750) levels from Monday or not. This is where the distribution happened on shorter time frame before the sharp down move on Monday.
What can be expected now:
We need to see if Buyers get a follow through above PDH or not. Above PDH, 13680 levels, POC levels of 13725-13750 are important. If prices get accepted above this, prices might probably fo to test poor and weak high levels (swing highs) again. Inside previous day’s range, 13540 levels are important and acceptance below these levels will open up downside possibilities. Also, today is expiry and tomorrow is holiday, so we need to be cautious and there is a chance that prices move sideways today.
Trade plan for today:
Nifty is expected to open with a gap up above PDH looking at the SGX. In case of Gap, I will stay out of open auction trade as there is not much clarity. I am bullish on nifty above PDH but I will opt for a long trade only in case prices gets clearly rejected at PDH and stays above PDH. and that can happen at any point of the day. In case of no clarity, i will prefer to stay out.
- With the last two days upmove, we are not approaching the consolidation zone before the sharp breakdown on Monday, So sellers are expected in that zone.
- Banknifty is weaker than Nifty, SO we need to see if Nifty moves upwards, banknifty supports it or not.
- Today is expiry and tomorrow is holiday, so a sideways sluggish move can be expected.
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.