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, Banknifty opened inside previous day’s range and sellers tried to push prices below PDL at openb but failed to do so. Responsive buying from PDL took the prices up almost one timeframing entire day forming a NVD day on upside. The prices are not in control of bulls and today, we need to see if bulls are able to give a follow through on upside.
What can be expected now:
Prices accepting above PDH is good for buyers. Only thing we need to observe today is any exhaustion of buyers as there can be an inventory adjustment break in that case. Until the prices are above POC (32535) levels, the control is with buyers.
PDH (32785) , POC (32535) and PDL (32140) are the levels to look out for from previous day’s range. Above PDH, prices can have a good upside movement we can test virgin POC levels 33250. Below PDL, prices might fins support at another virgin POC level of 31800.
Trade plan for today:
Banknifty is expected to open above previous day’s range and I am bullish in Banknifty till prices are trading aboe PDH. So, I will look for a long trade preferably at OTD up. In case prices accept inside previous day’s range, I will wait for IB range formation and then decide on the trade.
- Short trades are risky if prices above POC
- No long trade if prices trade below PDL.
- Banknifty and Nifty both have started moving up, so if this continues, Long trades would be a good idea, but be careful if any of these indices show weakness.
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.