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, Banknifty opened above PDH with a gap up and sellers were not able to even test PDH thus leaving a buying gap.Prices then moved up and after some consolidation near IB high broke on the upside and rose onetimeframing upside forming a trend day. This was what we had expected in the previous analysis also in case prices accept above PDH. With the price action yesterday, we have moved above swing high, so a downtrend is no more valid. Now, we can either move up or sideways on higher timeframe but no one knows the future, so lets see what happens.
What can be expected now:
Prices accepting above PDH is good for buyers. Only thing we need to observe today is that today is monthly expiry, so any exhaustion of buyers as there can be an inventory adjustment break on higher timeframe also. This might look like a downmove but can be only a pullback on higher timeframe. But, for intraday, we need to be cautious.
PDH and PDL are the levels to look out for from previous day’s range. Above PDH, prices can tes poor high levels of 34245 and below PDL , prices can test virgin POC levels of 32530.
Trade plan for today:
Banknifty is expected to open above previous day’s range and I am bullish in Banknifty till prices are trading above PDH. But since today is expiry, I am expecting the prices to be volatile at open. So, I will wait for prices to settle down and then plan my trade later also condifering that today is expiry.
- Short trades are risky if prices above PDH
- No long trade if prices trade below PDH.
- 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.
- Today is expiry, so in case of sluggish movement, we can ignore any directional trades.
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.