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 near PDH and after IB range formation the prices broke above PDH and continued upwards. Though this looked like a one time framing upside at the start, the move became sluggish after certain time which tells us that sellers are also present at higher levels even though they are not as strong as buyers. the PDH is at all time high, so above PDH is uncharted territory, so we do not know how prices will behave above PDH but till prices are accepted above PDH, buyers are in control till prices get back inside previous day’s range. Also, any exhaustion above PDH can bring prices back inside range and there are chances of a sideways move due to expiry.
What can be expected now:
We need to watch prices acceptance above PDH and in case of rejection, there is a likelihood of prices moving sideways with a downward bias inside previous day’s range due to expiry. But in case prices are accepted above PDH for a longer duration, we can expect a good upmove by buyers.
PDH (14670), VWAP (14608) , PDL (14523) are levels to watch out for price action. Above PDH, in case of acceptance, prices can move as high as 14830 and below PDL, VPOC at 14480 and 14340 are the levels to watch out for.
Trade plan for today:
Nifty is expected to open above previous day’s range and I do not have much clarity at open. So, I would wait to see price action at open and see where prices are getting accepted and then plan my trade later accordingly. Also, if I do not get good opportunity, I might ignore any directional trades for the day as there is a good chance of sideways move due to expiry.
- No longs below PDL and no shorts above PDH.
- Keep an eye on Banknifty and see if it is in sync with Nifty or not. For example, if nifty is rejected above PDH but Banknifty is accepted above PDH or vice versa, its better to avoid trade or trade small.
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 state