BANK NIFTY ANALYSIS

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, Banknifty opened above previous day’s range with a gap up and buyers quickly moved prices upside in the start. After some consolidation in the initial hours after a good upside starting move, the prices went further upside almost one time framing and forming a trend day on upside. This was a clear breakout above the sideways consolidation on daily charts and we can expect prices to move further upside in case breakout sustains. There is no point looking for any short trade until we start trading below this breakout candle, that is below PDL.

What can be expected now:

Banknifty is expected to further rise if prices are accepted above PDH. In case follow through by bulls above PDH is missing, the prices can move sideways in a narrow range for today which can be seen as absorption of supply by Bulls. I will only look for a long trade and not look for any short until prices are trading above PDL.

PDH and PDL are the levels to look out for from previous day’s range. Above PDH, prices are in uncharted territory and prices are likely to move further up. Below, PDL , we can look for gap filling.

Trade plan for today:

Banknifty is expected to open inside previous day’s range and there is no clarity at open auction. Only in case prices breaks above PDH, we can look for a long trade otherwise no trade would be good idea in Banknifty. either direction breaking PDH or PDL and no rejection from opposite side, i will plan to take trade in that direction.

Some cautions:

1. Watch out for price acceptance above PDH. In case of price acceptance and sellers weakness, we might see a good move above PDH in Banknifty.
2. No short trade if prices are above PDH and No long trades below PDL.
3. Watch out what Nifty is doing before taking a trade in banknifty for double confirmation.

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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.