Tuesdays trading is quite interesting. First 90 minutes of trading price started elongating higher with a fair odds of value forming higher and mid of the trading session we got inventory adjustment as the inventory gets long to too long. Last two days of momentum trading activity got halted with inventory adjustment.
Nifty got a price rejection at the double distribution levels 10464 and also at the bottom of double distribution levels 10387. Price fairly got struck in a range. Sentiment till remains positive on daily timeframe. One timeframing continued on the daily charts for the last five trading session. As of now 10500CE writers are stable and holding on to their confidence. Hence short term possibilities are there that nifty might continued in a range 10387 – 10464 from a very short term perspective(probably a day or two). Nifty Futures clearly trading in a go or no go zone. I personally went neutral on market direction.
Tuesday trading session price revisited the Prominent POC at 10487 (1st March). However price trend to close below the double distribution level 10464 post multiple activity around the zone. Weaker hand longs are removed from the market with a long liquidation action during mid of the day.
Market Profile Key Reference Levels
1)Prominent POC at 10568, 10700
2)Previous Week Low at 10155 and Prev Week High at 10437
3)Mechanical stops Upper Side 10617 and 10638
4)Weekly Gap at 10724(upper side).
5)Double Distribution Balance 10466
6)Weaker Low at 10155
7)Short term distribution balance 10387
For the above mentioned trading conditions it is good to prepare three cases.
1)Price opens in the range with low confidence price action. Maintain intraday traders with price rotating in a balance 10387-10466 range
2)Price accepts below 10387 range – expect a positional test towards 10150 levels again on the downside.
3)Price rejects around 10387 levels on downside and holds above 10387 maintain intraday – positional longs.