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 near PDH after a test near POC, bulls pushed the prices upside above PDH and one time framing continued till half of the day (H period). There was bo sign of sellers during this time but after half day, sellers entered to defend the selling tail from Monday profile (A period) and pushed the prices down to close back inside previous day’s range. the day formed was NVD up day and value area has moved up, so banknifty is still in control of buyers and we need to see if buyers give up the control or not. Any acceptance above PDH will confirm buyer’s still in control but in case prices trade inside previous day’s range, we have not much clarity in banknifty.
What can be expected now:
There was a responsive selling in banknifty from the highs of yesterday but this responsive selling was not strong enough to break even IB low. So, what we need to observe today is whether sellers are able to move prices further down below PDL or not. PDL (37245) is very crucial because 37100-37250 is also the zone of prominent POC and acceptance below 37100 would indicate shift of control from buyers to sellers. In case, prices are not able to break this zone 37100-37250, it is not good for responsive sellers but acceptance below this can take prices to test weak low at 36675 and poor low at 36400 levels.
PDH (37890) and PDL (37238) are the levels to look out for from previous day’s range.
Trade plan for today:
Prices are expected to open near PDL and I will wait and watch to get clarity in Banknifty. I have a bearish view in Banknifty below 37100 levels, so in case that breaks, I will look for a short trade later. In case prices fail to break 37100 levels, I will probably stay out of any trades. Also, today is expiry, so we need to be cautious of volatility.
- No long trade below PDH.
- No short trades above PDL or even above 37100 levels.
- Today is monthly expiry, so be aware and cautious.
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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.