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 Thursday, Nifty opened inside previous day’s range and sellers pushed the prices below PDL at open and buyers were unable to push prices back inside previous day’s range. After a lot of sideways move below PDL, prices dipped further at last below IB low and ended near to day’s low forming a NVD down day. Now , I was not able to updated analysis for last two days but we were expecting a pullback to close the gap after a strong move on Monday and gap up on Tuesday. Since the buying gap was closed yesterday, the price action today becomes very important and we need to observe if the prices are getting accepted above or below POC – 15000 (POC is the area where the consolidation happened yesterday). Acceptance above POC (150000) would indicate end of pull back (retracement) and we might move higher and acceptance below POC (15000) would indicate that the pullback is yet not complete and we might move lower below PDL and in that case, there would be doubts in the uptrend in the higher timeframe.
What can be expected now:
Today is important day from price action perspective as price was retracing for the last three days after a big upmove on Monday and a gap up on Tuesday. Today , we need to see if these buyers who took the prices up are able to provide support or not. Also, on intraday prespective, POC around 15000 is an important level to watchout for and we need to observe if price is accepting above or below 15000 levels. From higher timeframe perspective, whether we close above or below 15000 levels in important.
PDH (15085) , POC (15000) and PDL (14910) are the levels to watch out from previous day’s range. Above PDH, we can test poor high at 15175 and below PDL, we can test the trend day VWAP levels at 14860. Acceptance below VWAP levels (14860) is not good for buyers in the higher timeframe also.
Trade plan for today:
Nifty is expected to open inside previous day’s range and there is not much clarity at open auction. So, i will wait and watch the price action probably till IB completion and then decide on the direction based on whether the prices are accepting above or below 15000 levels. In case of volatility and no clear direction, i might choose not to take any trades today.
- Short trades are risky if prices trade above POC (15000 levels).
- Long trades are risky if prices trade below POC (15000 levels).
- Today is an important day from price action perspective like a do or die day for bulls, so lets see if bulls are able to provide support.
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.