We had an inside day in NF on Monday. An inside day is when the last session is within the range of the previous session.
Based on some stats made known by RM, we have calculated the range of the break to be 50 ND points and 100 BNF points.
The only question is how to minimize risk and get a profitable trade.
This is the profile of the Nifty after Monday's session.
The profile on the right shows two separate auctions. But since the previous day's range did not break we can safely induce that the auction is the same even though the day has changed. ( In market profile we do not split the market in different days but in different types of sessions and one type of session can continue for several days)
Here is the combined profile for the 2 days since the auction is the same after the gap down on Friday.
In the next chart I have overlaid a vwap line and the profile is shown as a minute chart.
As can be seen price stayed below the 2 day vwap all day confirming that within the profile the seller is more dominant.
This vwap line is at 5871 and the first important line for tomorrow.
The 2 day POC is at 5664 and the second important line for the day tomorrow.
From the above it can be safely induced that shorts are right below 5871 tomorrow and can be added below the break of the day range with a Sl at 5871.
The range is given in the box to the immediate right of the profile and stands at 5847- 5892.
A break of the white vwap lines currently at 5853-5889 is also considered as break of the range.
The range extension could be 50 points either side of these values.
A move above 5871 can also bring some short covering and longs can be tries above this with sl at POC 5864.