Pre-Market Analysis: Nifty Future – 09th 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 Tuesday, price opened inside previous day’s range, and after a small buying seen at start, sellers pushed the prices down below PDL. But after C period, there was a strong buying support and responsive buyers took the prices back inside range and continued the up move to end the prices back near IB high. Value area moved down and day type formed was NVD down day but on daily charts, the day type is a nice hammer which is also a reversal sign but for that we need to have a confirmation with a follow through on upside. So, for now, there seems to be no one in control and we need to see if the responsive buyers that supported the prices yesterday can give a follow though upside above PDH today or not. I am bullish above PDH and bearish below POC. POC to PDH is a no trade zone.

What can be expected now:

We need to see if responsive buyers that entered after Second half yesterday can push prices further up above PDH or not.  We will have bullish view on any acceptance above PDH but in case they are not able to push prices above PDH, the struggle will continue which is not good for bulls as we are moving in downtrend on daily timeframe. 

PDH (17302), POC (17180) and PDL (17047) are the levels to look out for from previous day’s range. Acceptance above PDH we can test weak high 17530. Further acceptance above we can test weak high 17632. Acceptance below PDL we can test swing low at 16860.

Trade plan for today:

Prices are expected to open above previous day’s range and there is not much clarity at open auction but in case prices trade above previous day’s high and sustains till IB range, I will plan for a long trade.  If prices open inside previous day’s range and fails to break PDH or gets rejected above PDH and move back inside previous day’s range, I will ignore any long trade. We can plan a short trade inside previous day’s range but shorting is better if prices accept below POC. Also, since tomorrow is RBI event, there are good chances of sideways move today, so be cautious.

Some cautions:

  1. No long trades below PDH.
  2. No short trades above POC.

Disclaimer:

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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