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, Nifty opened above previous day’s range with a small gap up above PDH and sellers were not able to even test PDH. The prices moved up throughout the day but the trade facilitation to the upside was not very strong in Nifty as compared to Banknifty. But one thing to notice is that we have broken above the sideways consolidation and for now, it can be considered as acceptance above sideways consolidation but the prices should not come back now back into the consolidation range for bulls to be in control. Any further acceptance above PDH is likely to push prices higher in upswing.

What can be expected now:

Today we need to see if prices move further upside above PDH or struggle above PDH with same poor trade facilitation. In case prices get rejected above PDH, there is a chance of prices moving sideways but until prices clearly accept below PDL, I will not look for any short trade.

PDH and PDL are the levels to look out for from previous day’s range. Above PDH, there is uncharted territory and acceptance above PDH is good for bulls. But in case of rejection above PDH, we can probably test POC and then move up later. Only in case prices accepts below PDL, we can ignore any long trade and look for short trades.

Trade plan for today:

Nifty is expected to open inside previous day’s range and we can plan an open auction trade in case prices break PDH decisively. Till prices trade above POC, I will look only for long trades and I might look for short trades only in case price accept below PDL.

Some cautions:

1. Watch out for price acceptance above PDH. In case of buyer’s exhaustion and buyers not able to keep prices above PDH, there is a chance of sideways move else acceptance above PDH is bullish.
2. No short trade if prices are above PDH. Both indices are at all time high and acceptance above PDH means higher timeframe still want to take prices up.
3. No long trades below PDL.

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.