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Nifty 50 Bear Channel

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Market Overview: Nifty 50 Futures

Nifty 50 Bear Channel on the monthly chart. This month, the market formed a bearish bar that closed near its low, with a long upper tail. It is trading within a bearish channel after reaching the measured move target of the wedge top overshoot. On the weekly chart, the market has shown increasing trading range price action and is now trading within a triangle pattern. Despite this, the market remains in a strong bullish trend with no signs of a bearish reversal.

Nifty 50 futures

The Monthly Nifty 50 chart

Nifty 50 Bear Channel
  • General Discussion
    • Traders who are in a long position should continue holding, as the market has not shown any strong follow-through bars.
    • Traders who shorted at the low of the first strong bearish bar can hold their positions until the market presents a strong bullish close.
  • Deeper into Price Action
    • Following the first strong bearish close, the market did not produce a strong follow-through bar. Instead, it displayed a bearish close with a long lower tail, indicating a weak bearish reversal attempt.
    • This marks the first pullback after a strong bullish trend, which significantly increases the likelihood of a second upward leg before any potential reversal.
    • To reverse the bullish trend, bears need to create a pullback that matches the strength of the previous bullish leg. This means bears must form consecutive bearish bars to establish a solid reversal.
  • Patterns
    • The market is currently trading within a bearish channel. This channel is relatively narrow, suggesting that only bearish traders are profiting by selling near the upper trend line of the channel.

The Weekly Nifty 50 chart

Nifty 50 Triangle
  • General Discussion
    • After the strong pullback, the market has started trading within a triangle pattern. This week, the market has also formed an outside bar.
    • Bulls holding long positions should continue holding until the market shows a strong bearish breakout of this triangle.
    • Bears who shorted during the second leg down, anticipating a reversal, can hold their positions until the market produces strong consecutive bullish bars.
  • Deeper into Price Action
    • The market is showing increased trading range price action. Traders can expect similar trading range behavior on lower time frames in the upcoming week.
    • The market has now entered a breakout mode pattern, with the chances of a successful breakout on either side being approximately 50-50.
    • Before the formation of the triangle pattern, the market exhibited inside bars, outside bars, and bars without follow-through—these are early indicators of a trading range.
  • Patterns
    • The market is currently forming a triangle pattern. If traders achieve a successful bearish breakout, the likelihood of a reversal increases.
    • Conversely, if the bulls manage to secure a bullish breakout, prices are likely to reach the measured move target based on the height of the bull flag.

Market analysis reports archive

You can access all weekend reports on the Market Analysis page.

  • Hi Rishi, thanks for this post. Could you please consider posting a daily EOD chart analysis to help us learn faster?.

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