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 Thursday, Nifty opened inside previous day’s range and initiative sellers pushed prices down and broke PDL at first 15 min candle and took prices below PDL. The prices kept accepting below PDL with a missing follow through and after two FB at IB low, responsive buyers pushed the prices back indie previous day’s range. It was a non-trend day and value area shifted down. The non-trend day could be because of weekly expiry but sellers not able to push prices further down is a cause of concern. This indicates that sellers do not have much conviction and we need to be cautious about shorting this market for now.
What can be expected now:
Yesterday sellers failed to push prices down and responsive buyers cam in at the last to push prices back inside range. This is selling failure and we need to see if these responsive buyers are able to push prices further up or not. In case of acceptance above PDH, we can expect the prices to move further upside but in case of acceptance within previous day’s range we can expect sideways day. Any acceptance below PDL is not good for buyers.
PDH (17845), POC (17735) and PDL (17685) are the levels to look out for from previous day’s range. Above PDH, we can test poor high at 17985 and further go above it. In case of acceptance below PDL, we can expect price to test virgin POC at 17560.
Trade plan for today:
Prices are expected to open inside previous day’s range and there is not much clarity at open. Only in case of clear acceptance above PDH, I will plan for a long trade, otherwise I will wait for IB range formation and then look which side is having control to look for trade opportunity. I am bullish above PDH and bearish below PDL and have no idea inside range. Also, I am cautious on sellers after their failure yesterday to move prices down.
- No long trades below PDH.
- No short trades above PDL.
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.