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 near POC and sellers tried to push price down at open but buyers immediately intervened and took prices back at POC . From there , there was a lot of sideways move with an upward bias ending in NVD up day but this was a narrows range inside day as compared to previous day. This could indicate absorption of supply only if bulls manage to give a follow through to upsdie and break above PDH today. So, thats is what we need to observe today. Also acceptance above 36000 levels can give a good move to upside.
What can be expected now:
Today, we need to see if bulls are above to push prices above PDH adn above 36000 levels. IN case they do, we might have a good upside day otherwise today is expiry, and we can expect a sidewayready to move prices up today.
PDH, POC and PDL are important levels from previous day’s range. Acceptance above PDH can give a very good up move and acceptance below PDL can see prices testing virgin POC at 34900.
Trade plan for today:
Banknifty is expected to open inside previous day’s range and we need to see if prices are getting accepted or rejected above PDH. In case of acceptance, I might look for a long trade but in case of rejection above PDH, I will choose to stay way from market. Today is expiry, so we need to take into account the probability of sideways move.
- Short trades are risky if prices trade above PDH.
- Long trades are risky if prices trade below POC.
- Banknifty is outperforming nifty, but nifty is already at all time high whereas Banknifty is not, so this outperformance is what we expected from so many days (see earlier posts).
- Today is expiry, so there can be sluggish movement and a late volatility.
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.