Pre-Market Analysis: Banknifty Future – 6th Dec 2021

Posted by

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 Friday, price opened below previous day’s high and initiative buyers tried to take prices above PDH but failed. The open type was ORR in banknifty but responsive sellers also struggled in the start to push prices below POC and prices moved sideways in first half. Later responsive sellers took the control of the price pushed the prices down in second half owning to buyer’s exhaustion and tested the PDL. Value area moved in sideways and day type was NVD down day with and engulfing candle on daily timeframe.  

What can be expected now:

In daily timeframe the price broken the resistance trend line but not able to sustain it and the price closed below the trend line. It shows the Buyers are not strong enough to take the price further upside but there is also not much clarity in sellers yet and we need to see if sellers can show strength today and give a follow through downside. In case of price acceptance below PDL, we can expect further selling otherwise we need to wait and watch the struggle between buyers and sellers to get more clarity.

PDH (36970), POC (36750) and PDL (36175) are the levels to look out for from previous day’s range. Acceptance above PDH can give a big move to upside. Similarly acceptance below PDL can give a big move downside and test Buying tail at 35840 and swing low at 35470.

Trade plan for today:

We can expect the price to open near PDL and wait to see where prices are getting accepted. If it is accepted below PDL, I will plan for a short trade. In case price open trades above PDL and fail to break PDL, I will not be looking for short trades and I will wait for IB formation and then look for trading opportunity later.

Some cautions:

  1. No Short trades above PDL.
  2. No Long trades below PDL or IB low.

Leave a Reply