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, Banknifty opened inside previous day’s range and sellers pushed the prices below PDL giving a follow through on the downside. Though there was a later half buying in Banknifty which tested the IB high, this up movement can be on account of expiry and cannot be trusted unless we have another follow through to upside today. So, which direction prices trade from here on in the key. In case of acceptance above PDH, the prices might move upwards but in case of any acceptance below PDL or even below POC, we might move down. Also, since this is a new series, the levels are not exact and we need to see currrent context also as to what Banknifty is trying to do today.
What can be expected now:
Today, we need to observe where prices are getting accepted in Banknifty. Acceptance above PDH would give us some up move but I am not comfortable taking a long trade in banknifty as of now, So I will probably ignore it. If prices are accepted below POC, then there is a probability of down move and I might look for a short trade there, but in case of any uncertainty, I will ignore any trades in Banknifty for today and observe the prices.
PDH , POC and PDL are the levels to look out for from previous day’s range. Acceptance below POC is not good for buyers.
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 action. I am looking for short in case of acceptance below POC btu no short trade till prices trade above POC levels. Also, I will ignore any long trades in Banknifty for today.
- No short trade above POC levels.
- Nifty and Banknifty both has given a breakdown and this is a new series. So we need to observe prices in start and in case buyers are weak, then we can look for a short trade if both indices are in sync.
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.