Market Overview: Nifty 50 Futures
Nifty 50 High-1 Breakout on the weekly chart. This week, the market gave a weak close with a long tail at the top and a very small body. The market showed a bull breakout of the high-1 but failed to deliver a strong close, and it is still trading inside the bull channel. Overall, there has been an increase in trading range price action. On the daily chart, Nifty 50 is trading inside a large triangle pattern. Since the gap between the bottom trend line and the top trend line is wide enough, traders can look for scalping opportunities.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are holding a bull position should continue holding, as the bears have still failed to give strong consecutive bear bars. This reduces the chances of a reversal for now.
- Traders who shorted on the high-1 failure or are in a short position after the market gave a bull breakout of the all-time high may continue holding their positions, but with a tight stop loss.
- Traders who are not in any position may wait for the market to either give a strong bear breakout of the bull channel with follow-through, or they can enter a long position if the market gives a strong bull close.
- Deeper into the price action
- Although the market is forming trading range price action, the chances of a bull breakout of the previous swing high are relatively higher than a reversal, as the market is still in a bull trend.
- In general, the chances of a reversal are much lower than the chances of a continuation of the trend. Therefore, whenever a trader structures a reversal trade, she should consider a much higher risk-to-reward ratio compared to entering a with-the-trend position.
- Patterns
- The market has formed a tight trading range along with an inside bar. On a breakout, traders can expect a small measured move to either side (depending on a bull breakout or bear breakout), based on the height of the pattern.
The Daily Nifty 50 chart
- General Discussion
- Traders who are in a short position may continue holding their positions with a tight stop loss and should at least hold until the market reaches the other side of the triangle.
- Traders who entered a long position after the double bottom pattern and expected the market to move up based on the measured move may exit their positions and enter again on a reversal back up.
- Deeper into Price Action
- As the market is trading in a trading range price action phase, traders should expect quick and unexpected reversals. For this reason, traders should look for quick exits when trading in a trading range price action phase.
- Patterns
- On a bull breakout of the triangle pattern, traders can set their first target as the measured move up based on the height of the double bottom. Once that target is achieved, the next target will be based on the height of the triangle.
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