Pre-Market Analysis: Nifty Future – 6th Dec 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 Friday, price opened above previous day’s high and it seems buyers tried to take it up as follow through upside after testing PDL but managed to only test virgin POC at 17510 level where higher timeframe responsive sellers pushed the price back inside previous day’s range. Once the prices was pushed back inside range it moved down and consolidated sideways after IB range formation and further breaking down in the second half. However, sellers were not able to test PDL even though the price closed at day’s low. Value area moved sideways and day type was NVD down day.

What can be expected now:

Thursday bullish momentum was diminished with Friday’s selling, but prices was not able to test the PDL which shows not so strong momentum by sellers even though they clearly had upper hand on Friday. What we need to see today is if sellers are able to follow through below PDL or not. In case price break down PDL. we can expect further down side. Acceptance inside previous day’s range or rejection of prices below PDL is not good for sellers and we need to be cautious about that if we are planning for short trade.

PDH (17515), POC (17410) and PDL (17220) are the levels to look out for from previous day’s range. We need to watch both sides at 17600 and 17000 levels to conclude the trend.  Acceptance inside range can test POC and acceptance above PDH can test poor highs at 17605 and can move further up. Acceptance below PDL can test weak lows of 17100 and buying level of 17000 below which prices can fall to 16850-16750 levels also.

Trade plan for today:

We can expect the price to open near PDL and in case of acceptance below PDL or OTD down at PDL, I will plan for a short trade but that is risky looking at the low level buying now a days. So be careful in shorts. In case price open trades above PDL and acceptance inside range, there is no shorting opportunity. In that case, I will wait for IB formation and look for trade opportunities later bases on IB placement but I will not be looking for short trades above PDL.

Some cautions:

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

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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