Pre-Market Analysis: Nifty Future – 25th 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 Monday, prices opened inside previous day’s range and after an immediate test of POC, initiative sellers took the prices down below PDL. There was some buying below PDL at start but it was not sufficient to push prices back inside range and thereafter, prices broke IB low after getting rejected at PDL. For rest of the day, prices moved further down and created a Trend Day down with one timeframe selling throughout the day. Price closed at the low of the day and value area shifted down. So, we can clearly say that Prices are in control of sellers for now. 

What can be expected now:

Monday was a big trend down day and therefore the control is still with sellers. What we need to see today is again if sellers can follow through to downside below PDL or not. In case of open below PDL or any acceptance below PDL, we can expect further down move. If prices fail to break below PDL, we can expect a sideways to up move but it would be risky to take long trade after such a big down day.     

PDH (17600), POC (17270) and PDL (17012) are the levels to look out for from previous day’s range. Acceptance above PDH can test virgin POC at 17830 and acceptance below PDL, we can test weak lows at 16842.

Trade plan for today:

Prices are expected to open inside previous day’s range near PDL and there is not much clarity at open. We need to observe if prices are getting accepted or rejected below PDL and only in case of clear acceptance below PDL at open, I will plan for a short trade. Otherwise I will wait for IB range formation and then again look where prices are getting accepted or rejected with respect to VWAP (17270). I am bearish below VWAP and bullish above that.  

Some cautions:

  1. No long trades below VWAP (17270)
  2. No short trades above VWAP (17270)


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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