Pre-Market Analysis: Nifty Future – 15th 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 Monday. Nifty opened below PDL with a big gap down and sellers immediately pushed the prices further down from open with open drive down and forming an open-high. After the initial push down by sellers, the prices started consolidating for most part of the day and later towards the end sellers again broke IB low and pushed prices further down closing at the bottom and forming a NVD down day with a large range. The value area is clearly down and this down move is also a breakdown on daily charts but Nifty is now at 200 DMA which can be important support. A fall below PDL can break prices below 200 DMA which will not be good for bulls.

What can be expected now:

Today, we need to see if buyers are able to protect 200 DMA or not , that is if they are able to keep prices above PDL or not. Any break of PDL will not be good for bulls and prices can continue to move further down but usually market takes a breather after a big down day, so it will not be surprising if market moves sideways today. In that case, what would matter is if the sideways move is below or above POC and that will determine who is in control and the possible trade direction.

PDH (17130), POC (17005) and PDL (16800) are the levels to look out for from previous day’s range. Acceptance above PDH is bullish and we can close the gap at 17280 levels or even test the virgin POC at 17345 levels. On acceptance below PDL, we can test virgin POC at 16560 levels which will again act as important support.

Trade plan for today:

Market is expected to open inside previous day’s range near PDL and there is not much clarity at open auction. So , I will wait and watch where the prices are getting accepted with respect to POC (17005 levels). I have a bearish view below POC but I will opt out of any short trades if prices accept above POC. In case of rejection at POC or acceptance below PDL, I will look out for a possible short trade but will be cautious of possible sideways move today.

Some cautions:

  1. No long trades below POC.
  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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