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 just below PDL and in first 30 minutes sellers pushed prices down but were not able to follow through further. After first 30 minutes, prices moved sideways inside IB range for first half and then responsive buyers broke IB high and took prices back inside previous day’s range testing POC. The sellers defended the upmove at POC and prices closed back near PDL forming NVD up day but value area has shifted down.
What can be expected now:
Yesterday’s upmove in the second half was due to sellers exhaustion, so we need to see if responsive buyers are able to follow through further on upside or not. In case prices are not able to accept above PDH, we can expect sellers to take control again and try to push prices down. But, today is expiry, so there can be a sideways move if prices accept inside previous day’s range. Acceptance beyond previous day’s range can give a good move in that direction.
PDH (18086) , POC (17980) and PDL (17925) are the levels to look out for from previous day’s range. Above PDH, we can test weak high at 18140 and further go above it. In case of acceptance below PDL, we can expect price to test poor low at 17770.
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 below PDL, I will plan for a short trade, otherwise I will wait for IB range formation and then plan my trades. I am bullish only above PDH and will look for a short trade if prices fail to break PDH after IB range formation either at Fb of IB high or break of IB low.
- No long trades below PDH
- No short trades above PDH
- Banknifty is weaker than Nifty and is trading at low of the sideways range. So, we need to observe it Banknifty breaks down or not.
- Today is also expiry ,so be aware of that.
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.