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 Tuesday, price opened just above PDL and sellers tested the PDL and got rejected. The open type was therefore ORR (open rejection reverse) and buyers took the control and pushed the price above IB high. However, although it looked like sellers are absent , the trade facilitation by buyers was also poor and day ended as NVD up day. The price closed near day’s high however the entire profile formed with-in previous day’s range with buying tail in the bottom of the profile.
What can be expected now:
As expected the price was in sideways and took consolidation at the bottom of the profile. But there was a good rejection from bottom and we need to see if buyers are able to push prices further up or not. These type of consolidations are common after a big move down, so I still have a bearish bias if prices fail to trade above PDH. In case of acceptance above PDH, this retracement can go much higher and therefore we need to avoid short trades.
PDH (17550) , POC (17410) and PDL (17250) are the levels to look out for from previous day’s range. If price accepted above PDH we can expect the price to test weak high at 17800. In case price traded below PDL, we can expect prices to test poor low at 17075 levels.
Trade plan for today:
Prices are expected to above PDH and thee is not much clarity at open auction. In case prices are accepted above PDH, I will wait and see where IB range is formed and will watch for trade facilitation by bulls. I am cautious on long trades but in case prices fail to trade above PDH, I will opt for a short trade
- No long trade below PDH.
- No short trades above PDH.
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.