Pre-Market Analysis: Nifty Future – 27th 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 Monday, Nifty opened inside previous day’s range near PDH and buyers broke PDH at open itself and tested the sellers gap above PDH. There was a responsive selling from the gap area and buyers were not able to overcome that selling. Also, the sellers were not strong enough to push prices back inside previous day’s range, so prices ended up moving sideways forming a Normal day or better to be called as Non-trend day because of relatively less IB. The value area has shifted upwards, so buyers have the advantage but since it was non-trend day, the conviction from the buyers was missing. So, this struggle can continue.

What can be expected now:

We can continue to see this struggle between buyers and sellers and things would be clear only once we start moving in a definate direction, that is below PDL or above PDH. Until, we trade inside previous day’s range, the trades would be risky but I will be looking for long trades only. Acceptance above PDH is very good for bulls and acceptance below PDL is not good for bulls.

PDH and PDL are the levels to look out for from previous day’s range. Above PDH , prices might first test 14580 and if accepted above it can go and test virgin POC area. Below PDL, prices can test yesterday’s POC.

Trade plan for today:

Nifty is expected to open inside previous day’s range and there is no clarity at open auction, so no trades. I would be looking for trade at PDH or PDL only, but till prices trade above PDL, i am bullish on Nifty. Only in case prices break PDL decisively, I will get bearish and look for a short trade otherwise not.

Some cautions:

  1. Short trades are risky if prices above PDL.
  2. No long trade if prices trade below PDL.
  3. Banknifty is relatively stronger than Nifty, so for Nifty to move in any direction, Banknifty should be supporting.

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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