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 near PDH and after some struggle at that zone, buyers overcame sellers and took the prices above PDH. Now, as clearly stated in yesterday’s market analysis, the control was with Buyers in nifty, so this is no surprise. As this was also expiry, the trade facilitation in nifty was not so good and NDV up day was formed with value area clearly moving up. So, control is with Bulls. Now, we need to see if we can get a follow through to upside or not today. Acceptance above PDH is good for bulls and rejection above PDH is not good for long trades today.
What can be expected now:
More than Nifty, we saw buyers action in Banknifty yesterday and with both Indices now moving up, an upmove at open due to momentum can be expected. But what we need to see is where bulls can hold this momentum or not as we have moved good amount in Both indies in last two days. Prices trading above PDH is bullish and Prices trading below PDH is not bullish in Nifty.
PDH (17635) , POC (17550) and PDL (17500) are important levels from previous day’s range. Above PDH, there is uncharted territory and acceptance above PDH can give a good upmove. Below PDL, prices can test virgin POC at 17465 and weak low at 17380.
Trade plan for today:
Nifty is expected to open above previous day’s range with a gap up and there is no clarity at open auction. What we need to observe today is whether buyers are able to keep prices above PDH or not. In case they are able to, we can plan for a long trade but in case buyers fail to keep prices above PDH, sellers would be expected to move prices down. But then, short trade can be planned but we need to be careful with position size in short trades as it will be risky one. POC inside previous day’s range is another area of support but absolutely no shorting above PDH.
- No long trades if prices trade below PDH.
- No Short trades if prices trade above PDH.
- Nifty and Banknifty both showed good movement upside. Expectation is this upmove will continue further but for that prices need to accept above PDH.
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.