Market Overview: Nifty 50 Futures
Nifty 50 Increasing Trading Range Price Action on the weekly chart. This week, the market closed weakly on the bearish side and continues to trade within the bull channel. Bulls were unable to provide strong follow-through after the breakout above the all-time high. On the daily chart, the Nifty 50 is moving sideways following a failed breakout attempt of the reverse Head and Shoulders pattern.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders in long positions may continue holding, as the market has not yet formed strong bear bars.
- Traders who shorted the weak bull breakout of the all-time high may keep holding their positions but with a tight stop loss.
- Traders without any position may wait. If bears manage a strong breakout below the bull channel next week, traders may consider entering a short position.
- Deeper into Price Action
- The number of bars with tails at both the top and bottom is increasing. Since the market is trading near the previous all-time high, traders should expect trading range price action in the coming week.
- In general, when the market is near an important level such as a big round number or a key resistance or support, it often moves sideways.
- Patterns
- If bulls achieve a successful breakout above the bull channel, traders can expect the market to rise based on the height of the channel.
The Daily Nifty 50 chart
- General Discussion
- Traders in long positions may continue holding until the market moves near the previous swing high.
- Traders who shorted the failed bull breakout of the Head and Shoulders pattern may keep holding their positions but with a tight stop loss.
- Traders without any positions may wait for the market to reach the previous swing high. If the market reverses again, assume it is trading inside a trading range.
- Deeper into Price Action
- The market has shown many V-shaped moves over the last two weeks, so traders should treat the current environment as a trading range.
- In other words, instead of entering and holding for swings, traders should aim for quick exits due to sharp and frequent reversals.
- Patterns
- If bulls manage another breakout above the previous swing high with good follow-through, traders can expect at least a measured move up based on the height of the trading range.
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