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 at previous day’s low and there was a freak downside movement till 17700 levels which was immediately bought and responsive buyers tried to push prices further up inside previous day’s range but failed. The sellers too control after that freak low and again moved the prices to test this freak low which was also IB low. This seems like a good momentum downside but after IB low was tested, buyers kept the prices inside IB range and prices closed inside IB range but below PDL forming a Normal day.
What can be expected now:
There was a clear down trend in price movement for last 4 days, however previous day’s low level (17700) is a strong support zone and buyers defended at this zone. Today we need to observe where the prices open and also price action at 17700 levels. Failure to move below 17700 can be mildly bullish but acceptance below PDL (17700) can test virgin POC at 17500. Acceptance above POC is not good for short trades but we need to observe buyer’s trade facilitation before we plan any long trades.
PDH (17944) , POC (17780) and PDL (17692) are the levels to look out for from previous day’s range. If price accepted above PDH, we can expect the price to test poor high at 18030. In case price traded below PDL we can expect to test the virgin POC at 17500.
Trade plan for today:
Prices are expected to open inside previous day’s range and there is not much clarity till prices trade inside range. In case, prices accept below PDL, I will look for a short trade otherwise I will wait for IB range formation and then based on trade facilitation by buyers or sellers, I will plan for a trade on IB breakouts or rejections.
- No long trade below PDL.
- No short trades above PDH.
- Volatility at open is expected because we are opening after a big weekend.
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.