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 Tuesday, Bank\nNifty opened above previous day’s range and after test of PDH, buyers tried to push prices above but the follow through after first 30 minutes was missing and sellers pushed the prices back inside previous day’s range but sellers also were not able push prices below POC and banknifty ended up as small range NVD down day with value area above previous day’s range. So, buyers have the upper hand but not fully in control and therefore the struggle is expected to continue till we break this sideways zone.
What can be expected now:
Again, both Nifty and Banknifty moved sideways. This can be seen both absorption of supply at higher levels which means bulls or exhaustion of bulls at higher levels which gives bearish indication. But what actually it is will be clear once we have follow through with good participation or trade facilitation in any direction. This is what we need to observe today.
PDH and PDL are important levels from previous day’s range. Above PDH, prices prices can test swing high at 37250 and below PDL, prices can test poor low.
Trade plan for today:
Banknifty is expected to open inside previous day’s range and there is not much clarity at open auction. What we need to see is where prices are accepted or rejected. A directional trade is good only if prices trade beyond previous day range, else this might turn up to be another sideways day. In case of a good movement beyond previous day’s range, I will look for long trades above PDH and short trades below PDL.
- No long trades if prices trade below PDL.
- No Short trades if prices trade above PDH.
- Nifty and Banknifty both have started moving sideways for now, so we need to wait and watch,
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.