Pre-Market Analysis: Nifty Future – 1st Nov 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 Friday, prices opened inside previous day’s range near PDL and initiative selling  pushed the prices down below PDL with good momentum which looked like a fall but that momentum faded after first 15 min and responsive buyers took the prices back inside previous day’s range indicating failure of this initiative selling.   After test of IB high, there was no follow through to upside   and responsive sellers pushed the prices back below previous day’s range and tested IB low and day ended as Normal day with value area moving down.  We can say that Control is still with sellers and we need to revise our opinion if value area starts moving higher.    

What can be expected now:

Prices have broken down the support trend line in daily timeframe, so the trend is in Bearish in higher timeframe.   So, after two days of big move to the downside , we need to see if sellers are able to follow through below PDL again.   Acceptance inside previous day’s range can indicate and sideways to downmove with control still with higher timeframe sellers but in case of any acceptance above PDH, we need to be cautious on shorting.

PDH (17945) , POC (17800) and PDL (17656) are the levels to look out for from previous day’s range.   If prices trades below PDL,  can expect to test virgin POC at 17520 level and in case of any acceptance above PDH,  we can expect prices to test virgin POC at 18040 levels. 

Trade plan for today:

Prices are expected to open inside previous day’s range near POC  and there is not much clarity at open auction but in case prices trade below previous day’s low and sustains, I will plan for a short trade.  If it is open inside previous day’s range or fails to break PDL, we need to wait to complete the IB formation and watch the price action.  However there is no long trade  as long as price do not clearly accept above Previous day’s high.

Some cautions:

  1. No long trades below PDH.
  2. No short trades above POC. 
  3. There was a clear rejection from lows in Banknifty which held while a similar rejection in nifty did not held and prices tested the lows again. So, we can say that Banknifty is stronger than Nifty and we need to observe which one gives us a direction 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, Nifty in above statements Indicate Nifty future for current month and not Nifty index.

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