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, Banknifty opened inside previous day’s range and in the start itself, sellers tried to take prices down but were not able to even test PDL. After the first 30 minutes of selling, responsive buyers pitched in and took prices up above IB high and continued the upmove to break PDH and close at top forming a NVD on upside. Now, yesterday Banknifty was strong compared to Nifty, so in case bulls are in control, we can expect same relative strength on Banknifty to continue. Nifty is near all time high, so there can be some volatility in Banknifty also due to this.
What can be expected now:
We will probably open with a gap up but this is new series, so what we need to watch today is the trade facilitation by buyers above PDH levels. Exhaustion above this level is not good for buyers but we need to observe what nifty is doing today to get clue in banknifty.
Levels from previous day are not valid today. So we can wait for IB range (first 1 hour) and IB high and IB low will be important levels thereafter.
Trade plan for today:
Nifty is expected to above previous day’s range and we need to observe trade facilitation by bulls. In case trade facilitation is not very clear, I will wait for IB range formation and then decide on a trade.
- Short trades are risky if prices trade above 35350.
- Long trades are risky if prices trade below 35350.
- Need to keep eye on Nifty, that is important today.
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.