Pre-Market Analysis: Nifty Future – 29th 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, HVN (High volume node

Observation from previous day:

On Thursday, Nifty opened below previous day’s range with a gap down and buyers were unable to even test PDL and gap sustained. Although there was a selling pressure, the prices basically moved sideways as compared to previous day’s which could be on account of monthly expiry yesterday. Today, we need to see if sellers are able to push prices further down or not. Also, there could be chance of a strong reponsive buying but in case the buyers struggle, sellers can again take control.

What can be expected now:

There has been a one way down move from some days, so in case sellers fail to take prices below PDL today, we might see some bounce or a sideways move. But in case of buyer’s exhaustion, that counce is likely to be sold off. Also, there is an upcoming budget event, so volatility is expected.

PDH (13900) and PDL (13700) are the levels to look out for from previous day’s range. Acceptance above PDH can give further rise, but rejection above PDH can get prices to test PDL.

Trade plan for today:

Nifty is expected to open near PDH and I will wait and watch for rejection above PDH to take a short trade. Also, I will not be looking for any short trade until prices are above PDH. In case, i do not get a good opprtunity, i will not be taking any trade today.

Some cautions:

  1. Watch out for trade facilitation above PDH. In case of buyer’s exhaustion, there is a chance of prices getting rejecting and sellers dominating.
  2. No short trade if prices are above PDH as if there is any shortcovering, that can be with a sharpo upside.

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, Nifty in above statements Indicate Nifty future for current month and not Nifty index.

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