Market Overview: Nifty 50 Futures
Nifty 50 entering into the Tight Trading Range again after the bulls failed to give a follow-through bar after its bull breakout. The market this week gave a third consecutive bearish close. The bear bar has a small body and closed near its low, while the market continues to trade inside the bull channel. Traders may expect trading range price action in the upcoming week. On the daily chart, Nifty 50 is now trading below the big round number 25,000. The market is currently moving within a bear channel. As it approaches the bottom of the trading range, traders may find selling opportunities.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are in a long position may exit or hold their positions with a tight stop loss, as the market can give a successful bear breakout.
- The market has almost given a bear breakout of this bull channel, so traders who are not currently holding any position can enter short positions once the market gives a strong bear breakout with a follow-through bar.
- Deeper into Price Action
- This time, the market has formed the strongest bear leg since the start of this bull channel, so the chances of a bear breakout are high.
- Bulls had tried to give a bull breakout of the tight trading range but failed after a strong bull close. In scenarios like this, the market usually moves in a measured move down, based on the height of the breakout bar.
- Patterns
- If the bears are able to give a successful bear breakout of the bull channel with good follow-through, then the market might start trading in a range equivalent to the height of this bull channel.
- According to the market cycle theory, whenever the market is in a strong breakout phase, it transitions into a tight bull channel, then into a broad bull channel, and finally converts into a trading range before entering a breakout phase again.
The Daily Nifty 50 chart
- General Discussion
- Traders who shorted near the top of this bear channel should continue holding their short positions, as this is now the second attempt by the bears to re-enter the trading range.
- Traders who entered near the top of the trading range (considering it as a support level and expecting a reversal upward) must exit, as the bulls have failed to reverse this bear leg.
- Traders who are not currently in any position can consider shorting on the next open, as the bear leg is strong and there is a high chance this bear channel may continue until it reaches the bottom of the trading range.
- Deeper into Price Action
- The market is now trading near the big round number 25,000, which indicates increased trading range price action. Traders should adjust their approach; instead of holding for longer swings, they should consider quick exits to protect profits due to potential quick reversals.
- Patterns
- If the bears are able to give a strong bear breakout of the bear channel, then traders should expect a measured move down based on the height of the bear channel.
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