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 inside previous day’s range at POC which was just below PDH and moved sideways. For most of the day, prices remained sideways with a small IB and towards the end, sellers moved the prices down and closed at PDL forming a NVD down day. The value area is sideways. Since, Last two day’s value area also formed inside Tuesday’s range, it shows the prices are getting consolidated in a sideways and for further direction, prices has to break this range (41800-40400)
What can be expected now:
With price closing at the low of the day in yesterday’s session, we need to see if these sellers are able to follow through to downside. So, in case of acceptance below PDL , we can expect more downmove but trade facilitation of sellers would matter. In case prices are rejected below PDL, we can expect a sideways to bullish move in banknifty. Also, as today is an expiry day , we can expect volatility..
Trade plan for today:
Prices are expected to open near PDL and there is not much clarity at open auction. We need to see where prices are getting accepted or rejected with respect to PDL and then can plan a trade accordingly. It is better to wait for IB range completion to get more clarity in banknifty. Also , as today is expiry, we need to be cautious on position size and risk management if we get any trade.
- No long trades below PDL.
- No short trades above PDL.
- Today is expiry day and we can expect a high volatility in price movement and need to be cautious while taking trades.
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.