Market Overview: Nifty 50 Futures
Nifty 50 Approaching All-Time High. This week, the market closed strongly in the bullish direction, near the top of the bull channel. Since the channel is not very wide, traders may need to take aggressive entries when considering short positions, such as using limit orders. On the daily chart, the Nifty 50 has broken out of a large trading range. Now, the bulls need some follow-through to confirm this as a successful bull breakout.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders in a long position may continue holding their trades. Those who entered near the bottom of the bull channel and planned to exit near the top might choose to close their positions, as the market could pull back again.
- Traders not currently holding any positions may consider shorting on a strong bear bar since the market is not trading near a previous swing high and is positioned at the top of the bull channel.
- Deeper into Price Action
- Bears attempted to reverse the trend after the first breakout above the all-time high by forming several consecutive bear bars but failed to create a reversal.
- If the market gives a bullish breakout from the bull channel, traders can expect it to breach the all-time high and make a measured move upward based on the height of the channel.
- Patterns
- As the market is at a critical level (the all-time high), traders should expect trading range price action in the upcoming weeks.
The Daily Nifty 50 chart
- General Discussion
- Traders holding long positions should continue to do so, as the market has given a bullish breakout from the trading range.
- Traders who exited their long positions when the market reached the top of the trading range might wait for a strong follow-through upward move before re-entering on a strong bull close or a high-1 setup.
- If the bulls fail to produce a good follow-through, traders may consider entering a short position on a strong bear close or after the bears form strong consecutive bear closes.
- Deeper into Price Action
- The bullish breakout from this trading range appears climatic. If the bulls fail to maintain follow-through, traders can expect the market to make a measured move down based on the height of this bullish leg.
- Patterns
- If the bulls manage to provide a strong follow-through, there is a high chance that the market will make a measured move up based on the height of the trading range.
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