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 near PDL and as we expected, the buyers provided support to Nifty at POC and moved the prices up. So, this marks the end of retracement (pullback) and Nifty broke the poor highs on upside above PDH to close at highs making Friday a trend up day. But , before prices moved up in second leg , there was a lot of Selling absorption above PDH and that area becomes the POC today (15100 zone). So, POC (15100) today is very important and price trading above POC (15100) is bullish and can give a potential move upside. Prices trading below POC (15100) would mean Nifty can again turn to sideways zone on higher timeframe. `
What can be expected now:
Today, we need to see if bulls are able to follow through to the upside above PDH or now. The follow through at open auction above PDH can take prices to test the swing highs or all time high levels. Still, if we trade below POC levels , there is not point shorting the prices as we can expect buying anytime. Only if prices trade below POC, we can look for a short trade otherwise not.
PDH (15225) , POC (15100) and PDL (14990) are the levels to watch out from previous day’s range. Above PDH, we can test virgin poc (15300), swing high (15375) and all time high (15430). Below PDL , we can go back to test swing low at 14910, but after such a big move on Friday, its unlikely that we will test below PDL, but then anything can happen.
Trade plan for today:
Nifty is expected to near PDH and I would look for price auction at PDH to take a long trade. In case there is OTD up at PDH, I will look for a long trade. Also, till price trades above POC levels, I will look for long trades only. No shorting if price trades above POC.
- Short trades are risky if prices trade above POC (15100)
- Long trades are risky if prices trade below POC (15100)
- We have a breakout on Friday, so today we need to see if there is a follow through and breakout sustains.
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.