Pre-Market Analysis: Nifty Future – 11th 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, Nifty opened just above previous day’s high and responsive sellers took the price down below PDH at start. After first 45 minutes, there was RBI event and strong initiative buyers pitched in and moved price immediately to upside with good momentum till poor high’s above PDH in next 45 minutes. After that, prices moved sideways for most of the day to close near the top at the end forming a NVD up day. This sideways move shows bulls exhaustion forming P shape profile . As of now, this is clearly buyers’ market due to absence of any strong sellers but the exhaustion at the top is not good and we need a follow through above PDH for bulls to continue in control. The value area also moved up, so prices are clearly in control of buyers as of now.

What can be expected now:

We need to see if buyers can move prices further up today or not. There has been strong buying on dips, so in case sellers are not able to push prices down, we can wait for sellers’ exhaustion to get into long trades but till prices trade above POC. We can expect sellers to take control below POC and push prices down but if prices trade below POC and sellers are also exhausted, there are chances of sideways move. I am bullish on market till prices trade above PDH and bearish below POC.

PDH (17650), POC (17610) and PDL (17440) are the levels to look out for from previous day’s range. Acceptance above PDH we can test swing high 17809. Acceptance below PDL we can test virgin POC 17180, Further on downside we can test swing low 17047.

Trade plan for today:

Prices are expected to open inside previous day’s range but near PDL and there is not much clarity at open. In case prices are accepted above PDH, I will look for a long trade otherwise I will wait for IB range formation and then plan my trades. In case prices fail to trade above PDH, we can look for acceptance below POC to plan for a short trade but there also we need to be cautious as sellers need to move prices below PDL fast and not get exhausted. Exhaustion of sellers would mean they had the opportunity but unwilling to take it.

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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