NF printed a normal variation-up profile.
Reference zones from today’s profile -
• Large Buying Tail = 22340 - 22423
• Value = 22445(VAL) - 22520(POC) - 22570(VAH)
• Selling Tail = 22640 - 22615
All the levels mentioned below in the report are from the Nifty April Futures contract after adjusting for the premium for monthly contract changes.
It is a failed trend day auction with tails at both extremes of the profile… buyers initiated a one-time frame uptrend auction from the start until the closing hour. However, selling pressure from the all-time high (ATH) zone pushed the price below the VWAP of the day, resulting in a failed trend day. NF had a four-day composite balance previously, and on Thursday, it broke out higher from that balance.
This failed trend day has quite a poor value area. An immediate hypothesis after such a failed trend day is to anticipate a balancing auction i.e. to look for a sideways move in the daily time frame rather than a trending one-way auction. For any trending move, acceptance at the tail zones (Profile Extremes) is necessary; otherwise, the price tends to return back into the value area and fill that poor value area.
So, last hour imbalance down, with heavy selling from ATH, might not materialize much for sellers unless they manage to get acceptance below the 22380–22410 zone. Similarly, for buyers, it is crucial to look for acceptance at the 22580–22610 zone.
As per the higher time frame, the outlook is bullish, and the 22050–70 zone now serves as a good negation point for this view. A daily TF value below this zone will indicate bearishness in the monthly time frame.
