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 Tuesday, Nifty opened inside previous day’s range near PDH and after an initial consolidation inside previous day’s range, prices tried to break IB high and PDH but got rejected. Sellers then tried to push prices below IB low but were met with responsive buying. Also, there were buying attempts to take prices above PDH but those also failed and Nifty formed a Neutral centre day at the low volume zone of previous day. Now, Neutral day means there is confusion between higher timeframe buyers and higher timeframe sellers, So until that confusion is resolved , we might see this struggle continuing with volatile moves.
But until we trade above 15155 as indicated in yesterday’s post, I will be having a bearish view on Nifty.
What can be expected now:
Today, we need to observe if prices are moving beyond previous day’s range which could be an indication of higher timeframe dominating on that side. But then, we need to be cautious of any rejections at extremes and this struggle between buyers and sellers continuing.
PDH (15080) and PDL (14915) are the levels to look out for from previous day’s range. Above PDH, we can test Trend day VWAP levels of 15155 where price action will decide if market is in control of sellers or buyers have taken the control. In case prices move below PDL, virgin POC at 14840 and poor lows at 14770 and 14675 levels can see some support and price action there becomes important.
Trade plan for today:
Nifty is expected to open inside previous day’s range near 15000 and there is no clarity at open auction. I am bearish till prices trade below 15155 levels, so I will be looking for a potential short trade in case prices test PDH or 15155 levels and gets rejected from either of these later. Only in case of price acceptance above 15155, I will look for a long trade later. In case prices stay inside range and do not test any levels, I will wait for IB range formation to look for a trade later.
- Long trades are risky if prices trade below 15155 levels.
- No long trade if prices trade below PDL and no short trade if prices trade above 15155 levels.
- Watchout for Banknifty also and see if both indices are showing similar signs for direction confirmation.
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.