Pre-Market Analysis: Nifty Future – 3rd Jan 2022

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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, Nifty opened just above previous day’s high with a small gap up and initiative buyers took control of the price from the start and moved it immediately to upside with an open drive up. The momentum of bulls decreased after that initial 30 minutes of upmove but sellers were not able to take advantage of this bulls exhaustion and prices kept moving up throughout the day forming a P shape profile. This indicates that bulls were able to hold higher prices and what we need to see today if they are able to follow through to upside or not. In case this bulls exhaustion continues, it is not a good sign for buyers but then we need to if sellers are able to take advantage of this exhaustion or not.

What can be expected now:

As price moved with good momentum and took broke above resistance levels also in daily timeframe, this hints at change of trend from down trend to uptrend but we need more confirmation because this can also turn out to be a bulls trap due to lack of big timeframe players in previous week. We can expect a follow through buying if prices accept above PDH and in case prices fail to accept above PDH, we need to see if sellers can take advantage and push prices down.

Trade plan for today:

Nifty is expected to open inside previous day’s range and there is not much clarity at open auction. We need to see if prices are clearly accepted above PDH and we can plan a long trade in that case but need to be cautious. Once prices breakout above PDH, it should not come back to previous day’s range. In case prices fail to trade above PDH, we can look for acceptance below POC to plan for a short trade but there also we need to be cautious and see strong selling. In case prices move big in start or no good movement, the prices can stay sideways and that will not give any trade opportunity.

Some cautions:

  1. No Short trades above PDH.
  2. No Long trade 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.

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