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 single print levels and sellers tried to push Nifty down at the start but there was a responsive buying which prevented the prices from going down. The Buyers did managed to Move Nifty above IB high but the prices got rejected above IB high and then for the rest of the day , there was a sideways movement inside IB range. So, it was kind of non-trend day but one thing to note is that entire price action was above 14700 levels and that is in favour of bulls unless we beak down below PDL today. The only concerns with buyers is that they did not moved the prices up yesterday above IB range, so there can be move sideways accumulation if that is the case but only if we trade above PDL. So, PDL becomes an important level to watch out today.
What can be expected now:
The prices traded above 14700 for most of the day yesterday, so it is in bullish territory and any follow through to upside can give a good move up. But in case prices move below PDL, acceptance or rejection below PDL becomes very important. IN case of acceptance below PDL, we might see a good move on downside. Also, Banknifty is trading near important support levels, so it becomes important to see if it is breaking down from support or not.
PDH (14850) , POC (14740) and PDL (14515) are the levels to look out for from previous day’s range. I would have a bullish view above POC, as sideways to bearish view below POC and bearish view below PDL. Above PDH, we can test poor high at 14973 and below PDL, we can test virgin POC at 14490 and then virgin POC at 14405.
Trade plan for today:
Nifty is expected to open inside previous day’s range near 14700 and there is no clarity at open auction. I will be watching price action at POC and PDL and probably will plan a trade after IB range completion in case nothing is clear at open. Also, since the fight between bulls and bears is expected to continue at open, any open trades can be risky, so in case we take trade at open, we need to be very cautious.
- No short trades if prices trade above 14740 levels. Even short trades above 14670 are risky.
- No long trade if prices trade below PDL.
- Watch out for strength or weakness in Banknifty. In case Banknifty breaks down below PDL, ignore long trades in Nifty.
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 ab