We had a normal day in the markets today with the markets choosing to develop value in the IB or Initial balance- the first 60 minutes of the day.
A normal day does not have a large longer time frame presence which is evident in the volume which happens to be poor.The profile is balanced on most days and gives the appearance of a D shape . Also the close happens to be at the day’s point of control or POC.
One of the things which happens after a normal day is a normal variation with the market quickly rejecting value of the normal day and moving higher or lower as the case may be.
Hence an exit of value and range will be the best trade scenario for tomorrow’s trade. It is often observed that this movement will be in the Initial balance as longer time frame returns to the market to see if they can take advantage of prices in value.
Moreover tomorrow’s day has a news announcement in the middle in the form of RBI’s announcement. This is a significant development big enough to alter inventory of all the major players. Watch for spikes around this time which can led us to visualise even a double distribution Day by the close.
Overall a range extension with 2IB hit is a very big possibility tomorrow.