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 sellers tried to push prices below previous day’s range aggressively in start but were not able to do so. This followed a responsive buying from near IB low and this buying took prices up above PDH and IB high to form NVD up day. Yesterday was also weekly expiry, so this bulls exhaustion can be attributed to that and same thing is valid for weak sellers also. Now, with expiry beyond us, we need to see trade facilitation by buyers or sellers today. Acceptance above PDH is good for bulls and can give us a good upside move and exhaustion of bulls inside previous day’s range is not good but it does not mean prices will move down. In case of bulls exhaustion, we need to observe sellers strength and in case of confusion, better to stay out.
What can be expected now:
Last two days are not good trade facilitation but till nifty is above 16000 levels , it is in bullish territory which means shorts are risk and dips will probably be bought. So, it better to look out for long trades but then trade facilitation on long side is the key. In case trade facilitation is poor, this would mean sideways or choppy moves and its better to stay out of Markets in that case.
PDH and PDL are important levels from previous day’s range. Acceptance above PDH can give a good move upside and acceptance below PDL can go and test the buying gap below PDL.
Trade plan for today:
Nifty is expected to open inside previous day’s range and there is no clarity at open auction. we need to observe where prices are getting accepted and look at trade facilitation by both bulls and bears to get a trade later. But in case of any confusion, better to stay out.
- No long trades if prices trade below PDL.
- No Short trades if prices trade above PDH.
- Banknifty again started showing weakness, so today is important day to observe Banknifty.
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.