Market Overview: Nifty 50 Futures
Nifty 50 Tight Trading Range on the weekly chart. The market closed strongly bullish this week with almost no tail at the top. As the market remains within a tight trading range, it becomes difficult for both bulls and bears to make profits. If the bears manage to start a bear leg from the current level, it would confirm the triangle pattern. On the daily chart, the market stayed within a trading range throughout the week. Since it is also trading near a big round number, traders should expect trading range price action.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders holding long positions may continue to hold until the bears manage to get a strong bear close below the tight trading range.
- Traders holding short positions should keep a tight stop, as the chances of the bull leg continuing are higher than a reversal due to the strength of the current bull leg.
- Traders not holding any positions should wait for a breakout with a follow-through bar. If the market gives a bear breakout with follow-through, traders can enter a short position.
- Deeper into Price Action
- Whenever the market starts forming too many inside bars, outside bars, inside-outside-inside bars, etc., you should start trading it like a trading range—even before the market confirms the exact top and bottom of the range.
- In the tight trading range, notice that all the bear bars have tails on the bottom, while the bull bars have comparatively smaller tails at the top. These insights may not help you time entries precisely, but they provide a sense of strength and can guide breakout trades.
- Patterns
- The market has not yet confirmed the triangle pattern. It will be confirmed if the market starts reversing from the current levels.
- If that happens, it could provide traders with an opportunity to enter short positions. However, since the bull leg is strong, traders should wait for a strong follow-through before entering.
The Daily Nifty 50 chart
- General Discussion
- Traders who entered a long position at the bottom of the trading range can consider exiting, as the market is now trading near the top of the range.
- Traders not holding any positions can wait for either a weak bull breakout or a strong bear bar near the top of the range before entering.
- Traders in a short position, having shorted near the 25000 level, may hold their position with a tight stop.
- Deeper into Price Action
- After a strong bull spike, the market formed a channel and has now transitioned into a trading range. The market has been inside this range for more than 20 bars, making the chance of a bull breakout from the upper side roughly 50-50.
- In general, the more time the market spends inside a range after a bull trend, the closer the odds of a bull breakout come to 50%.
- Patterns
- The bulls have still not managed to deliver a strong bull breakout with good follow-through above the big round number 25000.
- If the bulls do succeed in breaking out with follow-through, traders can expect the market to rise based on the height of the trading range.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
