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 there was some initial selling in the start but sellers were not able to even test PDL and responsive buying pushed the prices up to form a NVD up day. But as expected, the entire price action was sideways and within previous day’s range due to monthly expiry. Now , as the expiry is out of the picture, we might see some decisive move in either direction but in case of confusion between higher timeframe bulls and bears, this sideways moved can likely continue and then, it will be difficult for directional trades. On higher timeframe, we are in uptrend, so the chances of moving up are high but only if this sideways move or consolidation is done and also if the lows made in last week (15460) is held.
What can be expected now:
I am expecting prices to start moving higher but again trade facilitation by bulls matters a lot. In case of exhaustion, there is likely to be move inventory adjustment breaks resulting in a sideways move on higher timeframe. This bullish view on higher timeframe hold good only if we keep trading above 15460 levels, otherwise we need to review the view again.
PDH and PDL are important levels from previous day’s range. Also, this is start of new series, so exact levels are not important as they are from June series. Acceptance above PDH can test poor high at 15875 and all time high at 15908. Acceptance below PDL can test virgin POC at 15600.
Trade plan for today:
Nifty is expected to open above previous day’s range and I will wait for some bullish confirmation before option for a long trade. I am bullish on nifty if prices keep trading above PDL and will only have a bearish view if bulls are exhausted or prices trade below PDL. The formation of IB range and area where it is formed will give us more clarity on the price action.
- Short trades are risky if prices trade above PDL .
- Long trades are risky if prices trade below PDL.
- Today is first day of July series and lot size in Nifty is also reduced from 75 to 50.
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.