I got inspired by Girish’s “Car near a cliff” analogy and decided to post a few charts to explain the concept better.
Have a look :
This is the activity chart of the Nifty future this week illustrated through the use of market profile.
And the Bank Nifty future :
Random movements of the markets and the volatile nature is best shown on these 2 charts.
Now take a look at these two :
Nifty Future :
Bank Nifty Future :
The 2 charts above are a consolidated profile of the past 4 days of action.
It shows clearly what the market is trying to do here.
The Nifty future clearly shows a balanced profile developing over a 4 day period with a point of control around 5810.
You last heard about a balanced profile and the impact it has on a market in this post
You last heard about the importance of the 5810 level in this post here
There is a directional move ready to unfold.
Use 5810-20 to manage the risk.