Pre-Market Analysis: Banknifty Future – 29th 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 Thursday, Price opened just above PDL as Nifty and initiative sellers took the price down with full force.  Entire day the price was with sellers control and closed at day’s low.  One time frame selling had taken place after consolidation of 3 days in a row which indicates breakdown in daily charts also.  Value area is shifted down with good trade facilitation and market closed as trend day down.

What can be expected now:

As the prices are in seller’s control, we need to see if there is a follow through selling today  or not.  In case prices fail to break PDL, we can expect a sideways consolidation which is expected after this big down move.   Only in case of acceptance above POC, we can expect a fight from bulls.  Acceptance below PDL can move the prices down further. 

PDH (40950) , POC (40200) and PDL (39475) are the levels to look out for from previous day’s range.   below PDL, we can test virgin POC at 38888 and breakout levels of 38370. Above PDH, we can move again to all time high but this is less likely due to big selling day yesterday and momentum with Bears.

Trade plan for today:

Similar to Nifty. if price open with a big gap down, we will watch the price action for some time and plan for a trade after prices settle down So, no open auction trade in that case.  But, in case if prices open just below PDL or breaks PDL with acceptance below PDL, we can plan for a short trade. Also, OTD down at PDL can be a good short trade.  If prices fail to break PDL, we can look for a short trade again at rejection above POC else we need to wait for IB range completion and  look at the IB placement with respect to POC.  I am bullish above POC and bearish below POC.   

Some cautions:

  1. No long trades below POC.
  2. No short trades above POC.
  3. Today is beginning of new series (Nov series), so we need to observe the price adjustments and the levels we have are from October series

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.

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