Market Overview: Nifty 50 Futures
Nifty 50 Bull Channel and Wedge on the weekly chart. The market closed this week with a weak bullish candle and a small body. It is still trading inside the bull channel and is now near the lower trend line of the channel. Bulls have not shown strong follow-through after breaking above the all-time high. On the daily chart, Nifty 50 is trading inside a broad bear channel and has been showing trading range price action for the last two weeks.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are holding a long position may continue holding, as the bears have not given a bear breakout of the bear channel and have also failed to show a strong reversal attempt after the bull breakout of the all-time high.
- Traders who entered short positions on the all-time high breakout may continue holding their positions, but with a tight stop loss, as the bears have failed to produce strong bear closes.
- Traders who are not holding any positions may enter a long position if the market gives a strong bull close on the next close.
- Deeper into the Price Action
- As the market is trading near an important price level, which is the previous all-time high, traders should expect trading range price action in the coming weeks.
- Patterns
- If the bears succeed in getting a bear breakout of the bull channel, traders can expect the market to move down in a measured move equivalent to the height of the channel.
The Daily Nifty 50 chart
- General Discussion
- Traders who entered a long position near the bottom trend line of the channel may exit their positions now, as quick reversals are very common in a trading range price action environment like this.
- Traders who are not holding any positions may wait for the market to give a strong close on either side and then enter the trade.
- Deeper into Price Action
- When the market forms strong bear bars followed by strong bull bars, and vice versa, assume that the market is trading inside a trading range and manage trades accordingly.
- Patterns
- The market is trading inside a broad bear channel, which means both bears and bulls can make money by selling near the high and buying near the low, similar to a trading range.
- The market is also trading inside a small triangle, so on a breakout, traders can expect a measured move up or down based on the height of the triangle pattern.
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