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, Bank nifty opened inside previous day’s range near PDH, and sellers immediately pushed prices down below PDl with open high drive down. There was some buying at PDL, but it was not strong enough and sellers pushed the prices further down beyond PDL. After IB range formation , sellers were not able to push prices further down and prices consolidated near IB low signalling that there struggle between bulls and bears near IB low for rest of the day. Price closed at bottom forming non trend day, and value area shifted down which look like in BNF control is with sellers and it is a clear discrepancy with Nifty.
What can be expected now:
We need to observe price action today. The uncertainty will continue if prices trade within previous day’s range but acceptance beyond range will give us clarity on the direction whether acceptance is above range or below range.
PDH (38900), POC (38635) and PDL (38502) are the levels to look out for from previous day’s range. Acceptance above PDH can take prices to test weak high at 39185 and acceptance below PDL can test weak low at 38200.
Trade plan for today:
Prices are expected to open inside previous day’s range and there is no clarity at open auction. Also, there will not be much clarity if prices continue to trade within previous day’s range, so I will stay out in start and after IB range formation. In case prices trade beyond range, i might look for a trade in that direction later. .
- No long trades below PDL.
- No short trades above PDH.
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.