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:
After a trend day down move on Monday. prices opened just below PDL and sellers gave a follow through in the start and tested the levels near swing lows of 16850 but a strong buying from those levels pushes the prices back inside range and the initiative selling failed. After that selling failure, prices continued to move on upside and tested the trend day VWAP levels. There was not much selling visible after the initial selling and prices closed at top of the day forming NVD day up. But the value area moved down, so we cannot say that the buyers have taken the control and we need further confirmation today.
What can be expected now:
What we need to see today if the sellers who marked the prices down on Monday have given up control or not. In case they have not, they will not allow the prices to trade above PDH but in case bulls have taken over control, the prices should move up and accept above PDH. This is what we need to observe today and take decisions accordingly. Also, POC levels is crucial and I have a bullish view above POC and bearish view below POC.
PDH (17310), POC (17070) and PDL (16850) are the levels to look out for from previous day’s range. Acceptance above PDH virgin we can test POC 17620 and acceptance below PDL can give another good fall in prices.
Trade plan for today:
Prices are expected to open inside previous day’s range and there is not much clarity open. Only in case of clear acceptance beyond range at open, I will plan for a trade in that direction, otherwise I will wait for IB range formation and then look for a possible trade later. I will be looking for long trades above POC and short trads below POC. Also, today is monthly expiry, so we need to be aware of volatility.
- No long trades below POC.
- No short trades above POC.
- Today is expiry, so need to be cautious.
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.