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 range with a small gap up and initiative buyers quickly moved Nifty upside and there after Nifty continued its journey to upside in a clear one-time framing fashion. In yesterday’s pre market analysis, we talked about such a move in either direction to give us a confirmation and this happened on upside, so bulls have clearly been victorious. Therefore, our bias is also now on the upside (bullish) unless we have any good bearish day which makes us think otherwise. Now, price do not move in straight line up , so there will be some pullbacks and sideways movement but the overall bias remains on the upside until we trade above 16700 levels.
What can be expected now:
After a clear follow through to upside, we can expect some momentum to be still there and hence we can expect prices to move further up today if they accept above PDH. In case prices trade back inside previous day’s range, there can be a sideways move but until prices trade above 16700, I will be looking for only long trades,
PDH (16960) , POC (16880) and PDL (16744) are important levels from previous day’s range. PDH is also all time high and above PDH is no trade zone but there can be some resistance at around 17000 levels. Below PDH, price action at POC is crucial and below POC, we can drift down to PDL and close the gap but this is less likely to happen at least for today.
Trade plan for today:
Nifty is expected to open inside previous day’s range but near PDH and I will look for decisive break of PDH or OTD up at PDH (in case open above PDH) to get into long trades. In case there is no clear initiative buying at open which can take prices above PDH, I will wait for some time so see sellers exhaustion and then plan for a long trade. But after IB range formation, I will not look for a long trade below IB low. Also, no short trades till we trade above 16700 levels in Nifty.
- No long trades if prices trade below POC or below IB low.
- No Short trades if prices trade above 16700 levels.
- Banknifty also had a clear breakout along with nifty and both are in control of bulls. Also, i am expecting Banknifty to start out performing Nifty but lets see.
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.