Pre-Market Analysis: Banknifty Future – 14th 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 Wednesday, Banknifty opened above previous day’s range and after a test of PDH at open, Buyers moved the prices up. But sellers were visible immediately after the IB range and they tried to push the prices below PDH back inside range but failed. This shows that the sellers were from smaller timeframe and prices are still supported by higher timeframe buyers. NOw, there is a likelyhood of prices moving upside if accepted above PDH but today is expiry. So in case, prices get accepted inside previous day’s range, they will likely move sideways.

What can be expected now:

Banknifty tried to break above the sideways range but failed. But all the price action was above single print buying zone , so that provided the support. Now until we trade above PDL, there is no point looking for short trades. but in case we fail to break above PDH, there are higher chances of prices moving sideways throughout the day.

Trade plan for today:

Banknifty is expected to open inside  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. Also, today is expiry, so in case of acceptance inside previous day’s range, i have a sideways view and i will ignore any directional trades.

Some cautions:

  1. Today is expiry, so it would be in interest of option writers to keep prices inside range.
  2. No longs below PDL and no shorts above PDH. Also, in case of no proper entry, better to stay out.

Disclaimer:

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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