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, price opened below previous day’s low and there was immediate responsive buying which took the prices back inside range to test area near POC but after that initial buying, there was no follow through and price failed to test POC. Initiative sellers took over and pushed the prices down below PDL. Thereafter, prices broke IB low and 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 clearly in control of sellers.
What can be expected now:
Yesterday was a trend down day and therefore the control is still with sellers. What we need to see today is again if sellers can follow through further to downside below PDL or not. What we also need to observe is if there is any strong buying after this big down move day. So, I will be bullish above POC and bearish below it but we need to observe prices for a clear acceptance or rejection. Also, in case of any acceptance below PDL, we can expect further down move. If prices fail to break below PDL, we can expect a sideways move but up move can be expected only after prices start accepting above POC, else it would remain sideways.
PDH (17530), POC (17325) and PDL (17125) are the levels to look out for from previous day’s range. Acceptance above PDH we can test weak high 17632. Acceptance below PDL we can test swing low 16860.
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 POC. I am bearish below POC and bullish above POC.
- No long trades below POC.
- No short trades above POC.
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.