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 Thursday, Nifty opened inside previous day’s range and sellers tried to push prices down but were not able to even test PDL and buyers pitched in from the previous day’s buying tail and pushed prices back up but as we expected, the entire price action was mostly sideways within previous day’s range due to expiry. But now as expiry is over , we need to see if buyers are able to push prices above PDH and in case they do, how is the trade facilitation on the upside. Also, we need to watch for any signs of higher timeframe sellers entering at highs.
What can be expected now:
We can expect prices to trade with a positive bias and possible break above PDH. I have a positive view on Nifty unless prices breaks below PDL. (14500 levels) Acceptance above 14660 levels can give a good upside in Nifty but an exhaustion above 14660 will not be good in terms of intraday longs. Also, once price breaks PDH, it should not come back inside previous day’s range otherwise this would be seen as exhaustion.
Trade plan for today:
Nifty is expected to open inside previous day’s range and I would ops for a long trade in case prices break above PDH. From some days, there is a missing initiative activity and Higher timeframes seems to be moving the markets only once Initial activity has finished. So, in case of any trade at open, I would be looking for trade facilitation by buyers and would be keen to trail my stop loss, so that in case of failed initiative activity, I am out with minimum loss. But I would not be looking for any short trade if prices trade above PDL today. Even in case of buyer’s exhaustion, we can have a good long opportunity later if there is no clear rejections from the highs (hint for rejection is buying extreme/selling tail).
- No longs below PDL and no shorts above PDH. In fact, i will not be looking for any short above PDL .
- In case of any clear rejection at top, avoid any trades.
- Trade facilitation by buyers matters a lot today especially for intraday longs.
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.