Value areas & HVN’s

For those of you who have been following this blog for some time now, would have noticed that Market profile is a little more than knowing three values each day.

Yes, we do get a lot of requests for value areas everyday, but knowing how to use them at the right moment is more important than knowing what they are.

Besides Value areas, we often look at places where buyers and sellers exchange control or HVN’s which are important for a swing trade perspective.

Consider this, yesterday’s low of 5356 was a HVN which has been defended several times before. The close of 5397 yesterday was an HVN and the close of today 5475 is another HVN.

Let’s look the charts :

Nifty Value Areas &Amp; Hvn'S

The market always weighs in buyers and sellers at these levels, and it is important to see what reactions we get here.

Regarding value areas and profile shapes, you need not look beyond the Bank Nifty weekly chart :

Bn Value Areas &Amp; Hvn'S

Notice the value area low from 2 weeks prior (lower shaded blue region on left)
was the place where the downtrend halted.

The P shape gave evidence of longs unwinding and this week’s activity has been within the “p”. If we close above 10991 this week, we are set for higher levels in the Bank Nifty next week.

So there we are–same value areas but on a larger Time Frame giving similar results.

For those of you who want to know the Market profile better, and how to use information generated from the profile, we plan to have a live interactive audio-video webinar on our new platform soon. This webinar will be free and we would like to cover basic practices of Market profile as has been discussed on this blog.

Watch this space.