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 previous day’s range with a gap up and immediately sellers pushed the prices back inside range. In the start, it looked like clear rejection but sellers were not able to push prices below PDL and buyers pushed the prices from PDL back to close above PDH. So, the rejection does not hold good now and we might test for any business above the highs again.
What can be expected now:
There is not much clarity from some days because it seems like Sellers are now equalling buyers from the shorter timeframe but still there is a buying upswing on higher timeframe. This can go on for a while now until we have a strong rejection indicating entry of higher timeframe sellers. This is the best time to avoid trade or risk less fro Intraday traders. Continuous struggling of buyers at these levels will not be good in long run.
Trade plan for today:
Nifty is expected to open near PDH and today is expiry, so there might be lesser participation in open auction trades and hence I will avoid any open auction trades. After that , we need to see if prices are gettign accepted above PDH or got rejected above PDH to take a directional trade. I will be bullish above PDH and bearish below PDH and will plan my trade accordingly but today is also expiry, so it is better to trail stoploss if prices have moved in your favour to avoid getting hit by volatile moves.
- Today is expiry and also last day of the year, so expect prices to be volatile.
- In case, volumes and movements dry up, we can ignore intraday trades.
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.