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, Same like Nifty, price opened inside previous day’s range at POC level with open drive up type and initiative buyers pushed the price above PDH. But the responsive sellers entered in D period and aggressively pushed the price down. Price broke IB low and closd at the bottom of the prifole forming a neutral extreme down day. Usually these types of days form a swing high so PDH level is very crucial today. In case prices trade above PDH, the sellers can be seen as losing control but s long as they are able to keep prices below PDL, the market is bearish.
What can be expected now:
As bulls were not able to retain higher levels, we can say that prices are in control of sellers until prices start trading above PDH. We need to see if sellers are able to follow through to downside below PDL or not. Acceptance Inside range will be a struggle for both bulls and bears because that will also indicate missing follow through by sellers after the move down and we need to be cautious in that case.
PDH (36850) , POC (36200) and PDL (35650) are the levels to look out for from previous day’s range. Above PDH, prices can test weak high at 37090 abnd below PDL, it can test swing low at 35470 and poor low at 34850.
Trade plan for today:
Price expected to open near previous day’s low level and on clear acceptance of below PDL, I will go for a short trade. In case price open inside range, I will wait for a false break out at POC or PDH level to take a short trade. No long trade below POC and i only in case of clear acceptance above POC, I will look for long trade later with caution.
- No long trade below POC.
- No short trades above PDL.
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.