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, Nifty opened inside previous day’s range, sellers tried to push prices down at the start but after a test of POC, bulls defended POC, pushed the prices up and then continued moving it upwards one time framing which ended up as trend day. This is what we were waiting for – a good move in either direction with good trade facilitation and both were present yesterday. This indicates that Bulls have taken control in Nifty and we can now expect prices to move further up. But trading has no certainty, so nothing is for sure. Only issue today is expiry which can give a range bound day but there is no point looking for short trades as of now.
What can be expected now:
Now, with Nifty moving again to new all time highs and with good trade facilitation, we can expect prices to move up in coming days unless we get to see any kind of strong sellers price action in market. Any acceptance above PDH is good for further upmove and we can to look for sellers exhaustion or retracements to plan for long trades as of now. For Intraday, POC (17450) is a very important level and bulls are expected to provide support if we test this level.
PDH (17546) , POC (17450) and PDL (17380) are important levels from previous day’s range. Above PDH, there is uncharted territory but area near 17600 can act as resistance. Below PDL, prices can test virgin POC at 17350. and swing low at 17265 which is less likely today.
Trade plan for today:
Nifty is expected to open inside previous day’s range but near PDH and since today is expiry, I will wait for prices to settle down and see where IB range is being formed and then decide trade accordingly. Acceptance above PDH is good for long trades but in case prices fail to trade above PDH, a test of POC and sellers fail to take prices below POC can be good entry point for long trade later. Needless to say , I would be looking for only for long trades today and no shorting but will be cautious of my trades because of weekly expiry today.
- No long trades if prices trade below PDL.
- No Short trades if prices trade above PDL.
- NIfty and Banknifty both showed good movement upside. Expectation is this upmove will continue further but today is expiry, so need to remember that while taking trades.
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.