Pre-Market Analysis: Banknifty Future – 12th Jan 2021

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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, Banknifty opened above previous day’s range and immediately there was a strong rejection and sellers took the prices back inside previous day’s range. The prices tested PDL from which the fall was resisted by some responsive buyers and then prices moved sideways inside previous day’s range for rest of the day. This rejection could have been good if Nifty showed similar signs of rejection but Nifty is a different story altogether, so even though there was a strong rejection in banknifty, I have less conviction on the rejection because of strength seen in nifty. Overall, no clarity emerges from Monday’s trade and we need to keep observing.

What can be expected now:

Banknift is showing weakness compared to Nifty and Monday’s high become very important to watch out for in Banknifty. In case of accepted above PDH, there is a likelihood of a good move on upside but until that happens, we may stay sideways in Banknifty if Nifty does not show any weakness or rejection.

Trade plan for today:

Banknifty is expected to open above  previous day’s range and I do not have any clarity at open auction, so, I will wait and watch to see if prices are getting accepted or rejected above PDH and later see how is the trade facilitation. On in case of certain clarity and a good entry, I would be opting for a trade today otherwise I will just watch and stay out.

Some cautions:

  1. Watch out for trade facilitation above PDH. In case of buyer’s exhaustion, there is always a chance of sharp breakdown.
  2. No longs below PDL and no shorts above PDH. Also, in case of no proper entry, better to stay out.


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

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