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 Friday, Nifty opened inside previous day’s range but below POC. Sellers tried to take prices below PDL but failed. Responsive Buying then took the prices back inside range to test POC levels but buyers were also unable to push prices further high and for rest of the day , prices consolidated inside a narrow IB range forming a non-trend day. The value area was formed lower, so prices are in control of sellers but non-trend day signifies very low conviction, so we can say even though prices are moving down, the conviction of sellers was low on Friday. Also, buyers also seem not strong as they failed to take advantage of this low conviction of sellers. So, as long as we do not get a stronger one side day, this struggle will continue and we need to be cautious about our trading – No big positions, No big targets and we need to wait patiently for a very good opportunity.
What can be expected now:
There is not much clarity as of now but price trading above PDH is good for Buyers and price trading below PDL is good for sellers. Also, prices trading within previous day’s range has no clarity and we might see sideways movement till one side gains an upper hand.
PDH (14755) , POC (14685) and PDL (14620)are the levels to watch out from previous day’s range. Above PDH, we can test virgin POC (14865) and weak high (14940) and below PDL , we can test weak low levels at 14550 .
Trade plan for today:
Nifty is expected to open inside previous day’s range and there is no clarity at open. So I will wait for IB range formation and based on IB range placement, I will look for trades later. BUt as I said, we need to be cautious about our trades now and if we do not get a good opportunity, its better to stay out of Market and wait. As of now, no one – bulls or bears seems to be dominating, so any trades in these type of markets would be more risky.
- Short trades are risky if prices trade above POC
- Long trades are risky if prices trade below POC.
- Banknifty and Nifty are both weak now, but banknifty is weaker than nifty for quite a long time, so we need to watch out for any signs of strength in banknifty.
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.