Initial balance

The first hour sets the frame

The initial balance is the high and low of the first two TPO periods. On NSE that is 09:15 to 10:15.

The first hour is when the market's early participants, many of them reacting to overnight news and GIFT Nifty, set the opening range. Everything after is read against it.

On the morning shown, the first hour ran from 24,071 to 24,153.9: an 82.9-point initial balance.

Range extension

When the market trades beyond the initial balance later in the day, that is a range extension. It shows that a longer-term participant has stepped in and pushed price where the first hour did not reach.

On 18 June, C extended below the initial balance low, and E pushed further to 24,032.7. The question then becomes whether the extension is accepted, with value building out there, or rejected, with price returning into the range.

Wide or narrow

A wide initial balance often contains most of the day: the big move happened early, and the rest of the session trades inside it. A narrow one leaves room, and range extensions are more likely.

Compare today's initial balance with recent sessions rather than with a fixed number. On a quiet week a 50-point first hour in NIFTY can be wide; on a volatile one it can be narrow.

Initial balance and day types

James Dalton's day types are largely defined against the initial balance. A normal day stays mostly inside a wide IB. A normal variation day extends one side by up to about the IB's width. A trend day extends far in one direction and keeps going. A neutral day extends both sides and closes in the middle.

You rarely know the day type at 10:15, but the IB tells you which ones are still possible.

Initial balance in AXL Charts

AXL Charts marks the initial balance on every profile and can draw IB lines with extension targets at multiples of its width, each with its own style. On NSE the default first hour is 09:15 to 10:15.