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 just below PDH and initiative buyers pushed prices above PDH from where responsive sellers entered and pushed the prices back down, This was initiative selling failure but after first 15 minutes, buyers again entered and pushed the prices up. Although after IB range formation, prices moved sideways for most of the day to close near the top at the end forming a NVD up day which shows bulls exhaustion but this is clearly buyers market due to absence of any strong sellers. This phenomenon of buying of dips can go on for a while until some clear selling and rejection happens, so it is better to look only for long trades in this market. Then value area also moved up, so prices are clearly in control of buyers.
What can be expected now:
We need to see if buyers can move prices further up today or not. There has been strong buying on dips, so in case buyers are not able to push prices up, we can wait for sellers exhaustion to get into long trades. So, I am bullish on market till prices trade above PDL .
PDH (18059), POC (17985) and PDL (17905) are the levels to look out for from previous day’s range. Above PDH, we can test poor high at 18152 and in case of acceptance below PDL, we can expect price to test poor low at 17837.
Trade plan for today:
Prices are expected to open inside previous day’s range and there is not much clarity at open. In case prices are accepted above PDH, I will look for a long trade, otherwise I will wait for some kind of rejection to look for a long trade, That rejection can come at POC or PDL or IB low but in case prices trade below PDL, I will ignore any trade rather than look for short trades. So, no short trades for me today and long trades only if prices trade above PDL.
- No long trades below PDL.
- No short trades today.
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.