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 Friday, price opened inside previous day’s range and initiative sellers took control and pushed prices down to break below PDL. There was no strong responsive buying and selling continued though out the day with prices closing at the bottom of the day forming NVD down day. The trade facilitation by sellers was good with one time framing down, so we can say that prices are clearly in seller’s control as of now. Also this day was a good breakdown on daily charts.

What can be expected now:

There was a clear down trend in price movement, so the trend is bearish in higher time frame What we need to observe today is whether sellers can follow through below PDL and take prices further down or not. Inside previous day’s range, VWAP/POC levels of 36500 is very crucial and acceptance above that is not good for sellers, but till we trade below this level, we can say sellers are controlling the market.

PDH (37090), POC (36465) and PDL (36020) are the levels to look out for from previous day’s range. Acceptance above POC can test PDH and acceptance above PDH an test virgin POC at 37340 levels. Acceptance below PDL can test virgin POC at 35685 and buying gap level of 35460.

Trade plan for today:

Prices are expected to open near PDL and we need to see if there is any initiative buying breaking PDL at the open or OTD down at PDL. Only in case of clear selling below PDL, we can opt for a short trade, else we need to wait ( may be for IB range completion) and see how prices behave at POC (38460) and then take trade accordingly. I would be looking for short trades below POC but will ignore any short trade if prices trade above POC. Most probably, I will not opt for any long trades today.

Some cautions:

1. No Short trades above POC.
2. No Long trades below 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, Banknifty in above statements Indicate Banknifty future for current month and not Banknifty index.