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, Nifty opened near previous day’s high and initiative buyers pushed prices to upside above PDH absorbing initial selling. Thereafter, prices remained above PDH and as expected never came back inside range which showed bullishness for the day with acceptance above PDH. After IB range formation, buyers took the prices further up and Nifty continued upward movement for rest of the day with good trade facilitation (one time framing) forming NVD day up. Value area also moved up and we had a follow through from buyers after the breakout which was the observation point. So, clearly buyers are in control for now.
What can be expected now:
Today, we need to observe if higher timeframe buyers can move the price further up or not. There can be a sideways movement after two days of strong upside movement but until we have a turnaround, the sellers seem to be weak and therefore prices can continue moving up. In case buyers failed to keep prices above PDH . there can be some struggle again between buyers and sellers which can result into sideways day.
PDH (17692), POC (17559) and PDL (17410) are the levels to look out for from previous day’s range. Above PDH, we can test weak high at 17800 and further go above it. In case of acceptance below PDL, we can expect price to test poc level at (17225) .
Trade plan for today:
Prices are expected to open near PDH and although we are bullish, we need to wait and see if prices are getting accepted above PDH or not for sometime to even plan a long trade. In case prices accept above PDH clearly, we will look for sellers rejection to plan a long trade but in case prices fail to trade above PDH, we will wait for IB range formation and plan a trade at break /FB of IB range. No long trades below IB low.
- No Short trades above POC.
- 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.