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, Nifty opened inside previous day’s range near PDH and Sellers aggressively pushed the prices down below PDL at open itself forming a Big range IB day. After IB range formation, prices moved tried to move further down following a breakdown below IB low and tested the poor lows structures from previous days. We have been talking about this big inventory adjustment break from some time but we need to see if f we are done with this or we can move down further also. At 15465 levels, there was buying which pushed the prices back inside previous day’s range giving another big move to upside. On daily charts Friday’s price action looks like Hammer, so the lows of Friday become important from higher timeframe perspective. Also, since the value area has moved down, this is still downswing and what we need to see if whether this strong buying towards the end of Friday’s session is able to give follow through and move prices above PDH or not.

What can be expected now:

Today, we need to see whether buyers are able to push prices above PDH or not and also whether sellers are able to push prices below PDL or not (we are still in downswing). Any rejection from extremes or acceptance inside previous day’s range will facilitate and sideways movement and since we have a large range day on Friday, there will be very good chances of an Inside day with not so good Intraday opportunities.

PDH (15772), POC (15576) and PDL (15465) are important levels from previous day’s range. Acceptance below PDH can take prices to test virgin POC at 15825 and price action is critical at 15825. Below PDL, we can test the Gap area and probably close the gap testing 15365 levels.

Trade plan for today:

I will be bullish on Nifty above PDH and bearish below PDL. Also I am maintaining a sideways view if prices accept inside previous day’s range and in that case, I will probably stay out of directional trade unless I get a very good opportunity. Also, POC area inside previous day’s range is important from price action perspective.

Some cautions:

1. Short trades are risky if prices trade above POC
2. Long trades are risky if prices trade below POC.
3. Watch What Banknifty is doing as both indices are now moving in sync.

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.