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 Monday, price opened just above previous day’s low and initiative sellers pushed the prices below PDL at open itself with Open-drive down. After the break of PDL, there was a small consolidation below PDL but later prices started moving down and closed at the bottom of the day forming a Trend down day. Once prices broke PDL, it was not able to retest above the PDL level which shows sellers are not allowing the prices to move up absorbing all the buying pressure. The prices were clearly in control of sellers.
What can be expected now:
We need to see if Initiative sellers that were in control yesterday can follow through with selling and push prices below PDL or not. In case they are not able to, we can have a sideways move which is common after a big down day (market taking a breather). but in case they are not able to push prices and sustain above PDL, the struggle will continue and might result in sideways move. But sellers need to be cautious if prices start accepting above POC levels.
PDH (17255), POC (17100) and PDL (16940) are the levels to look out for from previous day’s range. Acceptance above PDH can test virgin POC of Friday and acceptance below PDL can test swing low (16850) and gap buying levels (16750).
Trade plan for today:
Prices are expected to open inside previous day’s range but below POC and we need to see if sellers are able to push prices below PDL at open or not. There is not much clarity at open but in case prices are accepted below PDL, we can look for a short trade. In case price is not able to break below PDL, we will wait for IB range and IB placement can give clarity for later. Only in case prices trade above POC, I will be looking for long trades but that also with caution as we are in downtrend on daily charts.
- No Short trades above POC.
- No Long trades below POC.
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.