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 Friday, Nifty opened inside previous day’s range near POC and sellers tried to push prices below PDL aggressively in start but failed. There after buyers pushed the prices above PDH and closed near the top forming a NVD day up. As we discussed on premarket analysis of friday, we would have some clarity on direction once we move out of this range. On friday sellers tried to move it down but failed and today with an expected gap up open, buyers are trying to push it upwards and we need to see if they sustain in giving a follow through to upside or they also fail.
What can be expected now:
We ned to see today if bulls are able to follow through on the upside which means that once prices start trading above previous day’s range, they should not come back inside range. Though trade facilitation above PDH also matters but a mere acceptance would indicate and absorption of supply and prices would be ready to move further up in coming days. In case prices get rejected above PDL, this struggle between buyers and sellers will continue.
PDH, POC and PDL are important levels from previous day’s range. PDH is also all time high and above PDH is no trade zone. Below PDH< price action at POC is crucial and below POC, we can drift down to PDL. Below PDL, we can test virgin POC at 16540 and then weak low at 16495.
Trade plan for today:
Nifty is expected to open above previous day’s range with a big gap up looking at SGX nifty and there type of big gaps are not good for intraday traders. Sellers will be acting on it but we need to observer their intentions and power, that is if they are able to move prices back inside previous day’s range or not. If not, then I would be bullish and will look for long trade but if prices trade below PDH, I will look for short trades but with a caution.
- No long trades if prices trade below PDH.
- No Short trades if prices trade above PDH.
- Watch out for Banknifty also if it is in sync with nifty or not.
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.