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 Monday, price opened at previous day’s POC level and initiative sellers took the price downside and broke PDL in A period itself (first 30 minutes). As per our pre-market analysis, the price broke the crucial 17700 support level which resulted into strong selling by higher timeframes. This is clear breakdown on the daily charts also and there was a clear one time framing down observed in nifty till end of the day. The prices are clearly in control of sellers and we need to be very cautious on any longs.
What can be expected now:
There was a clear down move with one time framing yesterday, so the control is clearly with sellers and we need to see if they follow through to downside below PDL or not. In case of any acceptance inside previous day’s range, we can expect and sideways move which would be nothing but a pause after a strong down trend day. In case, prices accept below PDL, we can see another good day of selling, therefore need to be cautious on long trade in that case.
PDH (17805) , POC (17450) and PDL (17302) are the levels to look out for from previous day’s range. In case price trade below PDL, we can expect to test the virgin POC at 17180. Single prints at 17530 can be important resistance today.
Trade plan for today:
Price expected to open near PDL but I will wait and watch the price action at PDL for sometime before taking any trade today. In case of clear acceptance below PDL, I will look for a short trade but in case prices fail to break PDL, I will wait for IB range completion and then take trade accordingly. I have bearish view till prices trade below POC and I will not look for any long trades below POC levels.
- No short trades above POC.
- No long trades below POC.
- In case of clear acceptance below PDL. don’t look for long trades. Warning Never catch a falling knife.
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.