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 there was some volatility due to RBI event but Nifty traded inside previous day’s range and formed a NVD up but mostly it was like a non-trend day. So, as we discussed in previous day’s analysis, till nifty trades inside previous day’s range, there will be confusion and no clarity. These are the times to stay out of market until we get some clarity. Again, same thing for today unless we trade decisively above PDH or below PDL, there is no clarity and better to stay out of markets. – Please read previous day’s analysis to see why we are saying no clarity in case of trading inside previous day’s range.
What can be expected now:
The price action yesterday was as expected and unless we break above or below previous day’s range decisively (please note decisively), then only we can form an opinion in that direction, but until then, I will probably stay out and just observe what Market is trying to do.
PDH (14700) and PDL (14550) are the levels to watch out from previous day’s range. Above PDH, we can test poor high at 14760 and above that weak high at 14890. below PDL , we can test swing low at 14460 and virgin POC at 14375 below that. Also, today is expiry, so there are chances of sideways move in case we stay inside previous day’s range.
Trade plan for today:
Nifty is expected to open near PDH and we need to see if buyers are able to push market up at open. only in case of clear acceptance above PDH , we can expect an upside move today, but in case prices come back inside previous day’s range, then sideways or down day can be possible. Also note that, today is weekly expiry, so a complete sideways day cannot be ruled out. So, I will look for long trade only above PDH and will ignore any other open auction trades, Later, I will see where IB range is forming, in case I feel there will be sideways move again, I will stay out of market.
- Short trades are risky if prices trade above PDH.
- No long trade if prices trade below PDL.
- Banknifty is slightly stronger than nifty now, so take look at both indices before planning a trade.
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.