Market Overview: Nifty 50 Futures
Nifty 50 Tight Trading Range Breakout Fail on the weekly chart. The market closed strongly bearish this week, marking the second consecutive bearish close following a strong bullish breakout from the tight trading range. It continues to trade within the bull channel and is currently nearing the lower boundary of that channel. On the daily chart, Nifty 50 is once again approaching the big round number. The market also formed a tight trading range on the daily chart this week, followed by a bearish breakout from that range. As the market gets closer to the big round number, traders should anticipate increased trading range price action.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are in a long position after buying on the strong bull breakout of the tight trading range may hold their long positions with a tight stop loss.
- As the bull channel is not very broad and the market has already reached the middle of the channel, traders should avoid shorting unless there is a strong bear breakout with a good follow-through bar.
- Once the market approaches the lower boundary of the bull channel, traders who are not holding any positions can consider entering a long position on a weak bear close or a strong bull close.
- Deeper into the Price Action
- Traders should expect increasing trading range price action as the market is moving between two big round numbers: the Rs. 25,000 level and the all-time high level.
- The top of the tight trading range will act as support, but if the bulls fail to reverse and continue upward within the bull channel, the market may form a small trading range.
- Patterns
- The market is trading near the all-time high and the big round number 25,000. Both act as strong magnets, increasing uncertainty in the market, which can lead to more trading range price action.
The Daily Nifty 50 chart
- General Discussion
- Traders who are in a long position after the breakout of the wedge top should exit their position, as the bears have invalidated the breakout by forming a big bear gap.
- Traders who sold the bear breakout should continue holding their position. However, make sure to keep trailing your stop loss, as the market is showing trading range price action.
- Deeper into Price Action
- After the bull breakout of the bigger trading range, the market has now given a bear breakout of the tight trading range.
- When breakouts occur frequently in either direction, assume the market is trading within a range and adjust your trades accordingly.
- Patterns
- The market has already achieved the measured move target of the tight trading range bear breakout and is now trading just above the previous trading range top.
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