Market Overview: Nifty 50 Futures
Nifty 50 Bull Channel on the monthly chart. This month, the market closed weakly bearish, with long tails on both sides of the bar. It is currently trading near the bottom of the bull channel. On the weekly chart, Nifty 50 is trading within a wedge and has formed an outside-outside bar, indicating that the market is now in breakout mode.
Nifty 50 futures
The Monthly Nifty 50 chart
- General Discussion
- Traders holding long positions can continue doing so, as the bears failed to achieve strong follow-through bars after the bear reversal attempt, reducing the likelihood of a full reversal.
- Bears who shorted on the strong bearish close near the top of the bull channel should continue holding their shorts until a strong bullish close appears.
- Traders looking to enter a long position should wait for the market to form strong consecutive bullish bars, as this would indicate the resumption of the bull trend.
- Deeper into Price Action
- Since the strong bearish close, the bears have failed to produce strong consecutive bearish bars, resulting in weak bearish closes. This reduces the probability of a reversal.
- There has been an increase in trading range price action, with bars showing tails on both sides. If the bulls fail to produce strong consecutive bullish bars, traders can expect a tight trading range to develop.
- Patterns
- The probability of a successful bearish breakout from a bull channel is approximately 75%. If the bears manage to secure a strong bearish breakout with follow-through, it could lead to a bear trend.
The Weekly Nifty 50 chart
- General Discussion
- Traders holding long positions should continue doing so, as the market is in breakout mode. In the case of a wedge bottom, the probability of a successful bullish breakout is higher.
- Traders in short positions should keep a tight stop or consider exiting on a strong bullish close.
- Traders who are not currently in any position can enter on the bullish breakout of the wedge. They may either enter on a strong bullish bar or wait for a follow-through confirmation.
- Deeper into Price Action
- The market is forming inside and outside bars, indicating trading range price action.
- After the initial strong bearish reversal attempt, the bears failed to establish another strong bearish leg. While the bears have managed to produce a strong bearish bar, they have not been able to generate a follow-through.
- Patterns
- The market is currently trading within a wedge. If the bears manage to secure a bearish breakout with follow-through, there is a high probability that the market will move downward, reaching the measured move target based on the wedge’s height.
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