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, Price opened above previous day’s high with a gap up and sellers tried to push prices back inside range but were not able to even test PDH. After IB range formation, buyers took the prices further high and Nifty continued higher almost for entire rest of the day with good trade facilitation forming NVD up day. Value area also moved up and price made All time high, So we can say that Higher timeframe buyers are in control for now.
What can be expected now:
Today, we need to observe if higher timeframe buyers can move the price further up giving a follow through to upside. Even if it is not able to trade above PDH, the buyers can support prices near POC levels but acceptance below POC levels would indicate struggle again between buyers and sellers. Today is also expiry, so we need to be cautious about sideways move if prices accept inside previous day’s range or volatile moves in the end in case prices move in one direction.
PDH, POC and PDL are levels to look out for price action today. Acceptance above PDH can take prices further up and acceptance below PDL can close gap and below that can test virgin POC.
Trade plan for today:
Prices are expected to open above PDH with a gap up and we will plan a trade if prices are rejected below PDH. In case Gap sustains, we will plan a long trade after some time and not immediately at open. In case of no open auction trade opportunity, we will wait for IB range completion and then plan accordingly. View is bullish in case prices accept above POC and sideways to bearish in case of acceptance below POC.
- No long trades if prices trade below POC.
- No Short trades if prices trade above POC.
- Today is expiry day, so we can have a sideways move and volatility towards the end, so we need to be cautious.
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.