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 Tuesday, Banknifty opened inside previous day’s range below POC and sellers tried to push prices down at open but were not able to push prices to test PDL. The bulls entered and moved prices above POC where a lot of consolidation continued. But after price broke this consolidation and also the PDH, it moved up one time framing upside with a good momentum. Now, this consolidation can be seen as short timeframe accumulation , so this area near POC (34900) becomes important support. On daily charts , banknifty has formed a good green bosy candle, so if this momentum continues (mean if we accept above PDH), we can see a good move in banknifty, otherwise if we are not able to accept above PDH, we can see a side ways move. Also, Nifty has moved to all time high, so in case bulls give a further follow through in nifty, we can expect a greater bullishness in banknifty.

What can be expected now:

We need to observe where prices are getting accepted today. Above PDH is bullish , above POC is sideways to bullish and below PDL is bearish. There is a selling gap (35440-35735) above PDH, so if we overcome that at open or in sometime, we can see a good upmove in banknifty otherwise this zone will act as resistance for now.

PDH (35345), POC (34900) and PDL (34785) are important levels from previous day’s range. Acceptance below PDH can test selling zone (35440-35735) and acceptance above that can swing high at 36075. Acceptance inside range will find support at POC (34900), but acceptance below POC is not good for Bulls.

Trade plan for today:

Banknifty is expected to open above previous day’s range and I will watch the price action at 35450-35750 levels. if accepted in this zone or above this zone, i will look out for a long trade. In case of any rejection from this zone, I will probably stay out or wait for sellers exhaustion to plan a long trade at IB levels but no short trades today.

Some cautions:

1. Short trades are risky if prices trade above POC.
2. Long trades are risky if prices trade below POC.
3. Nifty is stronger than Banknifty. Long trades are good if we get confirmation from both indices, so watch out for Nifty also.

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.