Pre-Market Analysis: Nifty Future – 26th 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 with open drive (open high) and initiative selling pushed the price down below PDL aggressively in start and closed the buying gap from previous days. But after IB range completion, sellers were not able to follow through to downside and responsive buyers pushes the prices back inside previous day’s range after IB. The up move continued till IB high was tested which gives us indication that the aggressive sellers in start were not keen on defending the up move which gives us a hint that the down swing might be over for now. But this view hold valid only till we trade above PDL. Any acceptance below PDL will negate this view.

What can be expected now:

With a strong rejection of lows in nifty yesterday, we can expect the prices to move further on upside today in case prices are getting accepted above PDH. In case of acceptance within previous day’s range we can expect sideways day with upward bias but in case of any acceptance below PDL, we can expect more fall in nifty. Also, inside range POC is a level and acceptance above POC is bullish.

PDH, POC and PDL are the levels from previous day’s range. Prices can test Poor high in case of acceptance above PDH and in case of acceptance below PDL, prices can move down with big fall.

Trade plan for today:

Prices are expected to open inside previous day’s range and there is not much clarity at open. Only in case of clear acceptance above PDH, I will plan for a long trade, otherwise I will wait for IB range formation and then look at the IB placement with respect to POC and then look for trade opportunity. I am bullish above POC and bearish below PDL.  

Some cautions:

  1. No long trades below POC.
  2. No short trades above PDL.
  3. Nifty is weaker than Banknifty (BNF is at all time high) and both the indices are not in sync. So, we need to be cautious on our 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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