Pre-Market Analysis: Nifty Future – 1st Apr 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 Wednesday, Nifty opened inside previous day’s range and moved sideways near VWAP of the previous day. This showed that there is not much clarity among buyers and sellers and struggle is going on. Nifty tried to scale above VWAL in the later half but failed and sellers pushed the prices down below IB low forming a NVD on the downside. This shows that sellers had the slight edge in yesterday’s price action but nothing convincing. So, we need to watch today’s price action to see if buyers can defend or not.

What can be expected now:

for bulls to gain control, they need to take prices above PDH otherwise we can say there is buying weakness and sellers can take advantage of that. For sellers to continue having control, the prices should trade and accept below at least POC levels of 14790 but we will have more clarity if prices accept below PDL. In case prices trade inside previous day’s range, we can expect a sideways move which can be also due to weekly expiry today.

PDH (14875) , POC(14790) and PDL (14720) are the levels to look out for from previous day’s range. Above PDH, we can test poor high at 14950 and below PDL, we can fill the gap at 14673 and below that we can test 14600 levels.

Trade plan for today:

Nifty is expected to open inside previous day’s range near PDH and I would be looking for buyers weakness to get into short trade at open auction. this could be open high formation or ORR at PDH. This can be a risky trade, so in case I take a trade, it will be with less initial quantity and I will increase it only once prices move in my favour otherwise I will be out with a small loss. In case of no clear signals, I will wait for IB range formation. Overall, I am bullish only if prices trade above PDH otherwise I am not bullish.

Some cautions:

  1. Short trades are risky if prices trade above PDH.
  2. No long trade if prices trade below PDH.
  3. Today is expiry, so prices can be volatile hitting stop losses on both sides.

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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