Pre-Market Analysis: Nifty Future – 04th 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 Thursday, price opened just below previous day’s high inside range and initiative sellers pushed price down at open itself below POC. After IB formation, the prices broke the IB low on downside and there was some buying but buyers were unable to move up the prices. The sellers continued moving the prices down throughout the day and prices closed at the bottom forming a trend down day. There was a clear control of sellers but there was no one time framing and therefore this trend down day was unexpected. So, even though value area moved down and prices seem to be in control of sellers, we need additional confirmation which should come through follow through to downside.

What can be expected now:

We need to see if sellers that moved the prices down yesterday were higher timeframe sellers and they intend to move prices further down or not. So, a follow through downside below PDL is good for short trade but failure to follow through below PDL will raise questions on the selling from yesterday and will not be good for sellers. In case, prices sustain above PDL, the struggle will continue and might result in sideways to upmove.

PDH (17785), POC (17630) and PDL (17500) are the levels to look out for from previous day’s range. Acceptance above PDH we can test poor high 17809. Further acceptance we can test weak high 18100. Acceptance below PDL we can test swing low17230,

Trade plan for today:

Prices are expected to open inside previous day’s range and we need to see if sellers are able to push prices below PDL at open or not. There is not much clarity at open but in case prices are accepted below PDL, we can look for a short trade. In case price is not able to break below PDL, we can look for a long trade if there is rejection below PDL otherwise we will wait for IB range and IB placement can give clarity for later.

Some cautions:

  1. No long trades below PDL.
  2. No short trades above PDL.


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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