Pre-Market Analysis: Banknifty Future – 18th Oct 2021

Posted by

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, Price opened near previous day’s POC and buyers took the price above the previous day’s high. Thereafter prices moved sideways in small consolidation range but above PDH. This was absorption of supply and we had the confirmation when prices broke IB high after a long Intraday consolidation. Subsequently higher timeframe buyers took the price with a big momentum on upside and Banknifty closed at the top forming a Trend day up. This last hours up move is also a breakout on Daily charts and it shows that all the sideways move that happened before was an accumulation but Smart money, So we can also expect more bullishness in Banknifty.

What can be expected now:

After a big move in Banknifty on Thursday, we can expect some sideways move with upside Bias which can be seen as pause from bulls. This sideways move can be seen as exhaustion only if it happens below PDH and in that case we can expect a IAB and prices testing POC levels. But in case there is an acceptance above PDH, we can have a further upmove by bulls today or in coming days.

PDH. POC and PDL are important levels from previous day’s range. Acceptance above PDH is more bullish and will make a new high, POC can act as good support and acceptance below PDL is not good for bulls even on higher timeframe and we can see a bigger break in that case,

Trade plan for today:

Prices are expected to open near PDH with a gap up and there is not much clarity at open auction in Banknifty as we are expecting some pause from Bulls after a big move up towards the end on Thursday. But strictly no short trades until prices trade above PDL in Banknifty. So, we would be looking out for Buying opportunities in Banknifty later today in case we get a good opportunity.

Some cautions:

  1. No long trades if prices trade below PDL.
  2. No Short trades if prices trade above POC.
  3. Banknifty and Nifty has shown a good breakout even on Daily charts. So, avoid shorting any of them for today.

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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.

Leave a Reply