Market Overview: Nifty 50 Futures
Nifty 50 Inside Bar Breakout on the monthly chart. This month, the market closed with a bearish candle that had a small tail at the top. It also broke down from the inside bar pattern, which increases the chances of a measured move down based on the height of that pattern. Currently, the market is forming the third leg of a triangle, giving traders room to sell at higher levels and buy at lower levels. On the weekly chart, Nifty 50 is developing a wedge pattern. This week, the market formed a strong bearish bar that closed near its low, while the bulls failed to gain follow-through after the bullish breakout of the bear micro channel.
Nifty 50 futures
The Monthly Nifty 50 chart
- General Discussion
- Traders who shorted at the low of the inside bar may hold their positions at least until the market reaches the measured move target.
- Traders in a long position may exit on the next open. Holding or scaling into a High-1 setup may not be a good move because the market is trading inside a triangle and there is an increase in trading range price action.
- Traders who are not holding any position may consider entering a short position on the next open, as the market is trading near the high of this triangle pattern.
- Deeper into Price Action
- In the past several months, the market has shown strong closes, but both bulls and bears have failed to get good follow-through bars.
- Overlapping bars and bars with tails on either side have increased, which are signs of trading range price action.
- Because of this, traders should adjust their approach. Instead of managing positions like in a trending market, they should manage them like in a trading range—entering and exiting quickly instead of waiting for big swings.
- Patterns
- When the market gives a bear or bull breakout of an inside bar pattern, it usually moves at least as much as the height of the inside bar.
The Weekly Nifty 50 chart
- General Discussion
- Traders who entered a long position on the bull breakout of the bear micro channel may exit their positions, as the bulls failed to get a good follow-through bar.
- Bears who entered short on the Low-1 entry bar may continue holding their positions until the market reaches the wedge measured move target, or unless the market gives a bull breakout of the wedge.
- Deeper into Price Action
- Even after the big gap up, the bulls failed to produce a good follow-through bar. Instead, the bears were able to form a very strong bear bar this week. This increases the chances of a successful bear breakout of the wedge.
- Patterns
- If the bulls manage to break out of the wedge, the chances of a small trading range forming—equal to the size of the wedge—will increase.
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