Pre-Market Analysis: Banknifty Future – 26th May 2021

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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 Tuesday, Banknifty opened inside previous day’s range and sellers immediately took prices below POC and after lot of sideways move, PDL was tested but prices were rejected below PDL. Now, we were expecting buyers to give follow through on upside, they again failed and prices moved down to test PDL and sellers also failed to break PDL. So, one important thing to observe today is whether sellers are able to break below PDL or not. In case, they are not able to, we might end up moving sideways. a upmove can be expected only once we trade above 35400 levels.

What can be expected now:

Today , we need to see whether the sellers who market the prices down yesterday in the second half are able to follow through to downside or not. Acceptance below 34150 levels will not be good for bulls and price tradiung inside previous day’s range will not be good for bears. But, we will not have a definate clarity unless prices starts trading and accepting beyond 34150-35400 zone.

PDH (35200) , POC (34750) and PDL (34430) are the levels to watch out from previous day’s range. Above PDH, we can test swing high at 35340 and below PDL , we can go back to test virgin POC of 34150. Below 34150, bulls would be in trouble.

Trade plan for today:

Banknifty is expected to open inside previous day’s range and i have no clarity in open auction, So , i will stay out. Also, I will probably stay out of market till prices trade within previous day’s rnage, unless i get a very good opportunity. Most likely, I might stay out of Banknifty today and Banknifty is weaker than nifty and there is not much clarity.

Some cautions:

  1. Short trades are risky if prices trade above POC (34750)
  2. Long trades are risky if prices trade below virgin POC (34150)
  3. Banknifty is weaker than NIfty, so it has to show strenght if Nifty has to move up , else we might end moving sideways.


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.

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