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 Monday, Nifty opened above previous day’s range with a open low and prices moved up, There was a freak high formed in Nifty future 600 points above, which can be ignored. The prices moved up and the small gap formed at open sustained. This is the follow through we were expecting by bulls and we can comfortably say now that the prices are no longer in control of bears as they were from last few days. So, there can be likely test of previous all time high again (15940 levels) and if we accept above that, we might move higher. Also, on higher timeframe, till the Hammer low (15658) is maintained, the prices will be in control of bulls even if we move sideways.
What can be expected now:
POC at 15840 becomes important level. Acceptance above that is bullish for me and I will have a sideways view if prices accept below that.
POC (15840) and PDL (15755) are important levels from previous day’s range. Acceptance above POC can take nifty higher and acceptance below PDL or even POC would mean sideways move which is not good for bulls.
Trade plan for today:
Nifty is expected to open inside previous day’s range and I would wait and see if there is a support at POC or rejection below POC to opt for a long trade. Also, Intraday trading is getting difficult now a days due to no clear domination between bulls and bears. In case prices accept below POC, I will probably stay out of market and wait only for a very good opportunity.
- Short trades are risky if prices trade above PDL.
- Long trades are risky if prices trade below PDL.
- The low of Friday becomes a very important support, so shorts above that levels are not okay.
- Banknifty is in sync with nifty, so we can take additional confirmation from it.
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.