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, we saw a responsive buying from Nifty and on Wednesday we saw a completely sideways move in Nifty which marked the value area higher. So, acceptance above PDH today would mean that bulls are in control but any rejection above PDH and if Nifty cannot sustain above PDH and comes back inside range, it would be warning sign for Bulls. Also, today is expiry, so we can expect volatility.
What can be expected now:
With a major event (FED meeting) over now, we can expect prices to catch up a direction now but which direction is not clear yet. Acceptance above PDH is bullish and acceptance below PDH is not bullish for Nifty. Also, today is expiry, so in case of confusion, we can expect prices to be volatile.
PDH (17617) and PDL (17520) are important levels from previous day’s range. Above PDH, prices can test virgin POC at 17665 and in case of acceptance above that, it can test all time high. Below PDL, prices can test virgin POC at 17440 but any acceptance below PDL is not good for Bulls.
Trade plan for today:
Looking at SGX nifty, Nifty is expected to open above previous day’s range with a gap up and there is not much clarity at open. We need to see if this Bullish open sustains and there is no selloff at open. In case of acceptance above PDH, I would be looking for a long trade later and in case of rejection above PDH, I would look for short trade. Also, today is expiry, so we need to be cautious about any volatile moves, so in case of favourable price moves, its good to keep booking profits.
- No long trades if prices trade below PDH (17617).
- No Short trades if prices trade above PDH (17617).
- Today is expiry and also there is euphoria at open. So trade cautiously and observe what market is trying to do instead of going with the crowd.
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.