Pre-Market Analysis: Nifty Future – 03rd Feb 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 Wednesday, price opened (Gap up) above previous day’s range and the prices moved sideways from there. Even though there was no strong buying or a follow up buying from buyers at start, the sellers were not able to close the gap or even test IB low. Now as this acceptance was above PDH, it was in favour of bulls and prices moved slowly on the upside with poor trade facilitation and closed at the top of the day. The day type was NVD up and value area shifted upside. So, we can clearly say control is with buyers.

What can be expected now:

There was a follow through from the responsive buyers which was to be observed and it came. So, for now control is with bulls and trade direction is long. But since the trade facilitation was poor by buyers, we can expect some down moved in between but until we keep trading above 17500 levels, I am bullish on higher timeframe perspective. Also as today is expiry day, we can expect volatility, so need to be cautious. 

PDH (17809), POC (17750) and PDL (17680) are the levels to look out for from previous day’s range. Acceptance above PDH , we can test weak high at 18100. Acceptance below PDL  we can close the gap and possibly test virgin POC 17545.

Trade plan for today:

Prices are expected to open near PDH and looking at the poor trade facilitation by buyers yesterday, I will stay out of open auction trades and observe. I am bullish on market but need a good entry point for long trade, so will wait for that to come. It could be a decent rejection of down move after IB range formation. Also, since today is expiry, there is a possibility of prices moving nowhere, so need to be cautious.

Some cautions:

  1. No long trades below PDL.
  2. 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.

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