Market Overview: Nifty 50 Futures
Nifty 50 Outside Bar on the weekly chart. This week, the market formed another bear bar with a small body, covering the previous week’s doji bar. It is currently trading within a wedge pattern and is approaching a breakout. A strong close with follow-through on either side could lead to a successful breakout. On the daily chart, the market is trading inside a bear channel, and trading range price action has been increasing over the past two weeks.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are in a short position can continue holding their position until the market shows a strong bull breakout with a follow-through of the wedge.
- Traders who are in a long position should continue holding their trades, as the chances of a successful bear breakout at the wedge bottom are low.
- Deeper into Price Action
- The market has increasingly started forming patterns such as inside bars, outside bars, and large bear bars without follow-through bars. These patterns are signs of a trading range.
- The bears’ reversal attempt was strong compared to the previous bull trend, indicating that there is still potential for a reversal.
- Patterns
- The market has been trading inside a wedge, with the chances of a successful bear breakout at the wedge bottom estimated at around 25%. Therefore, traders planning to sell the breakout should at least aim for a 1:4 risk-to-reward ratio.
The Daily Nifty 50 chart
- General Discussion
- Traders who shorted the failed bull breakout of the head and shoulders pattern can exit their trades on a strong bull close, as the market could enter a trading range.
- Since the market is trading within a broad bear channel, bulls can consider buying on a strong bull close.
- Deeper into Price Action
- Over the past several days, the bears have managed to achieve multiple bear closes, but almost none have resulted in a strong follow-through bar.
- With increasing trading range price action, traders can consider betting against a bear breakout if the bears fail to achieve a strong follow-through after the breakout.
- Patterns
- If the bears manage to achieve a strong bear breakout with a follow-through bar, traders who shorted the market can aim for a measured move down, based on the height of the bear channel.
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