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 Wednesday, Banknifty opened inside previous day’s range and sellers aggressively took Banknifty down at open breaking PDL but there was a strong buying which moved the prices back and took it near PDH. But again, there was buyer’s exhaustion near PDH and later in second half, sellers took prices down breaking the DPL and giving a breakdown below consolidation zone. So, for now, Banknifty looks to be in control of sellers and we need to see if they are able to follow through downside, that is moved further below PDL today or not.
What can be expected now:
We can expect sellers to move prices further down but today is also expiry, so in case sellers are not able to move prices down, we can expect prices to move sideways due to expiry. Only in case prices accept above VWAP level, we can see some up move but until then, I have a sideways to bearish view.
PDH (35550) , VWAP (35170) and PDL (34760) are important levels from previous day’s range. VWAP is very important level to decide who in in control.
Trade plan for today:
Banknifty is expected to open inside previous day’s range and there is not much clarity at open auction. Also, today is expiry, so there are higher chances of sideways move in Banknifty. So, I will probably stay out of Banknifty and look for trade only if there is a very good opportunity. Otherwise , I will focus only on Nifty.
- Short trades are risky if prices trade above VWAP
- Long trades are risky if prices trade below VWAP.
- Banknifty has broken down from consolidation range and we need to see if sellers are able to push prices further down or not.
- Today is expiry, so there can be a sluggish sideways move 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.