Pre-Market Analysis: Nifty Future – 25th Nov 2021

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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 and there was very low IB range formed which means neither bulls or bears were participating. What we wanted to see is a follow through to upside which and almost for the first half prices moved sideways in Nifty and failed to go up. This was an exhaustion after an up move with poor trade facilitation, so sellers entered in last 2 hours and pushed the prices down below IB low closing back inside previous day’s range and forming a neutral extreme down day and prices is back in control of sellers.

What can be expected now:

Neutral extreme day usually has a significance of forming at top or bottom, so we can expect that price will not be breaking PDH easily. But Having said that, sellers need a follow through to downside below PDL to demonstrate their control on prices. Otherwise in case prices fail to trade below PDL, we can expect a sideways day owning to Monthly expiry today. In case prices trade below PDL, we can expect a good down move although with volatility because of expiry.

PDH (17605) , POC (17570) and PDL (17360) are the levels to look out for from previous day’s range. Acceptance above PDH is very good for bulls in higher timeframe and it would indicate change of bearishness to bullishness but is less likely to happen today. Acceptance below PDL can test swing low at 17250and virgin POC at 17180 below it . Further break down can take prices to test poor low at 17070 levels.

Trade plan for today:

Prices are expected to open near PDL and I will opt for a short trade in case of break of PDL or OTD down at PDL but as today is expiry, we need to be cautious as volatility is expected. Also, in case prices fail to trade below PDL, I will stay out of any short trades. Long trades are not in the plan today until prices start trading above PDH.

Some cautions:

  1. No long trade below PDH.
  2. No short trades above PDL.
  3. Today is monthly expiry, so be aware and cautious.

Disclaimer:

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.

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