Nifty and Bank Nifty

One of our regular readers, Viren sent me these charts of the Nifty and the Bank Nifty.

I'll reproduce his message here:

As explained earlier, the purple lines are the value area and the yellow line is the POC which represents the highest volume of the day.Above value area buyers are in control and below value sellers..

BN was not a short except if it traded below 8440-8430 which was value area high from Friday. As you noticed that buyers came again at that level and took price higher.Had it entered value, it would have been a short.

In the Nifty, price entered value of friday and notice how it bounced off the POC.That was a good place to book shorts. Once it came above value again there was no looking back. A safe long was above 4994 and a short below 4880. 4994 was the Initial Balance, hence a cross above that was that Buyers were re-asserting. Conversely had it moved below VAH, we would have seen POC and VAL again.

See, if you observe the chart and listen to the message of the market trading is so much easier.

For tomorrow, the purple lines are the value area. Look to go long above VAH and short below VAL.

Cheers,


Well Done Viren...

I also use a lot of Market Profile for my swing trading and day trading requirements. What Viren is using are Volume Profile Charts, which look at the volume at each price point to fattom what the Buyer and seller are doing at any price.

I hope to add my own inputs in future posts..