Pre-Market Analysis: Banknifty Future – 8th July 2021

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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.

Some cautions:

  1. Short trades are risky if prices trade above PDH.
  2. Long trades are risky if prices trade below POC.
  3. 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).
  4. Today is expiry, so there can be sluggish movement and a late volatility.

Disclaimer:

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.

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