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 Wednesday, Banknifty opened inside previous day’s range and sellers pushed the prices below PDL after which there was a sideways consolidation and prices were pushed down later to closed at the bottom of the day forming a NVD down day. Now, Banknifty is at crucial levels and is looking ripe for a fall, so this becomes important that sellers give a follow through to downside and prices should not come back inside previous day’s range for a down move. Otherwise, buyers will probably take control and start puching prices higher to get a sideways to upmove.
What can be expected now:
Today, we need to observe where prices are getting accepted in Banknifty. Acceptance below PDL is very bearish and we might see a good downmove. Any rejection below PDL would mean sideways to upmove in Banknifty.
PDH , POC and PDL are the levels to look out for from previous day’s range. . Acceptance below PDL can take prices further down and we can test levels of 32950 in banknifty. Also, today is expiry, so we need to be cuutious about a sideways move.
Trade plan for today:
Banknifty is expected to open inside previous day’s range and I will for IB range formation and observe the price actions. I am looking for short below PDL and a long above PDL but i will give time for prices to settle down instead of taking trade immediately. Also, today is expiry , so a sideways move cannot be ruled out.
- No short trade above PDL and no long trades below PDL.
- We need to wait for acceptance beyond extremes and just testing of extremes is not valid to take a trade.
- Observe Nifty also. Nifty is stronger than Banknifty, so in case of a long trade opportunity in Banknifty, Nifty should be supporting.
- Today is expiry, so in case of volatile movements, probability of sideways move is high.
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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.