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:
After a trend day down move on Wednesday. prices opened inside previous day’s range on Thursday near POC following a US markets bullishness. Now, this is not a good market to be in as it looks like higher timeframes are fighting with each other. The sellers who marked the prices does on Wednesday seems like not active on Thursday as prices did not even tested IB low and on the other hand Buyers also do not seem strong as they were not able to take prices and close above PDH. So, there is not much clarity as of now and PDH levels are the battle ground Acceptance above PDH is in favor of bulls and acceptance below PDH would mean sellers have not given up their control fully yet and they can be expected to mark prices down again.
What can be expected now:
We are not clear if the sellers who marked the prices down on Wednesday have given up control or not. In case they have not, they will not allow the prices to trade above PDH but in case bulls have taken over control, the prices should move up and accept above PDH. This is what we need to observe today and take decisions accordingly.
PDH and PDL are important levels from previous day’s range. Above PDH, we can test poor high and then all time high and below PDL, prices can test poor low.
Trade plan for today:
Prices are expected to open inside previous day range and we need to see if bulls are ablee to push prices above PDH or not, Above PDH is bullish, below PDH is bearish but in case there is not much clarity, I will wait for IB range completion and then decide on trades based on where IB range is formed with respect to previous day’s range. Today is also RBI event, so prices can be dull at open and we can witness some volatility after the event is over.
- No long trades if prices trade below PDH.
- No Short trades if prices trade above PDH.
- Yesterday both indices moved sideways which could be due to expiry and RB event today, So expect some volatility after the event and be cautious on your positions.
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.