Pre-Market Analysis: Nifty Future – 12th Oct 2021

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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 Monday, prices opened inside previous day’s range and buyers took the prices above PDH but after first half of upmove, prices struggled to go up and there was a small retracement in the second half because of this exhaustion. Now, on daily charts , we are again moving up but the trade facilitation is poor, so it seems like prices are moving up because of absence of sellers rather than strength of bulls and this type of moves are difficult to trade. Usually this type of exhaustions leads to a good correction ( a bigger inventory adjustment break) but as every dip is being bought now a days, if we do not have a good IAB, we might spend more time sideways.

What can be expected now:

Today, we need to see if sellers can take advantage of the buyer’s exhaustion or sellers are also weak and every dip gets bought. In case there is no good trade facilitation from either side, its better to stay out of market and wait or trade with reduced position size.

PDH and PDL are important levels from previous day’s range. Acceptance above PDH is bullish and in case of acceptance below PDL, prices can test virgin POC.

Trade plan for today:

Prices are expected to open inside previous day range and there is no calrity at open auction, so i will wait for IB range and then decide whether I should be taking any trade or just stay out and watch the markets. We can expect a good directional move only in case of acceptance beyond previous day’s range.

Some cautions:

  1. No long trades if prices trade below PDL.
  2. No Short trades if prices trade above PDH.
  3. Value are is moving up but trade facilitation is poor, so be careful of your directional trades.

Disclaimer:

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.

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