Pre-Market Analysis: Nifty Future – 12th Feb 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 inside previous day’s range near POC and moved little upside intitially but then for the entire day, it just went sideways. This looked like a planned expiry by option writes (cannot be better than this) where they eat up all premiums. So, nothing much can be made out from this day and we still have no clarification on this sideways move if this is re-accumulation or distribution (so, yesterday’s analysis is still valid). We will wait for a follow through above swing high or swing low in Nifty for confirmation.

What can be expected now:

We need to see if sellers are able to follow through to downside today or not. In case prices are accepted below PDL, we can see a good down move but in case prices get rejected below PDL, we can see buyer’s pitching in and prices moving sideways to upside throughout the day. In case of rejection below PDL, this would just mean that sellers are not yet ready to take prices down and in case smart money is distributing, the distribution is pending.

PDH and PDL are the levels to look out for from previous day’s range. Above PDH, we can test swing high and below PDL , we can go down to test swing low and then virgin POC at 14950.

Trade plan for today:

Nifty is expected to open inside previous day’s range but near PDL and open auction can be volatile. But, we need to see if prices are getting accepted or rejected below PDL to plan out trade. In case prices struggle to break PDL decisively, we can look for a long trade opportunity later after sellers are exhausted.

Some cautions:

  1. Watch out for price rejection below PDL . In case of seller’s exhaustion below PDL or even inside previous day’s range, there is a chance of buyers pitching in an taking prices higher to test PDH.
  2. No short trade if prices are accepted above PDL. and no long trades if prices are accepted below PDL.

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, N

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