One of the major advantages of trading the markets through the market profile is to recognise the kind of day developing and positioning your selves accordingly for the market action.
We had a normal day today. Recognizing it early helped save a lot of frustrations and un-necessary trades.
Very early the longer time frame seller entered the market at the open to drive prices down but was not successful in driving prices below 5990 which was yesterday’s highs and near Value area high. Buyers stepped in over here and in the ensuing battle which was fought between buyers and sellers around vwap all day, managed to take the market higher by the close to neutralise the morning seller.
The result was that we had a day where value was created higher and the momentum of the upmove maintained.
The day can be recorded as a lost opportunity for the sellers and fits in with Shai’s observation early today that an uncorrected upmove out of an oversold condition is generally a very bullish sign and indicates a kick-off to a new trend.
The biggest reaction so far has been 40 points in this 260 point upmove from Monday.
Weekly VAH for the Nifty is 6055 which should be fought out tomorrow.
The Bank Nifty closed above it’s weekly value high and in the process sent out a message to the larger index- a message we feel would be heeded tomorrow.