Market Overview: Nifty 50 Futures
Nifty 50 Outside Bar on the monthly chart. The market is forming a bull outside bar. This month, it closed with a strong bullish candle. After two consecutive bull bars, the chances of a reversal—despite the strong pullback—are very low. Instead, the market is more likely to enter a trading range or a breakout mode pattern. On the weekly chart, Nifty 50 has already shown a strong bull breakout from the bull channel with good follow-through, and it is now forming a bull micro channel.
Nifty 50 futures
The Monthly Nifty 50 chart
- General Discussion
- Traders who entered into a long position at the high of the previous month’s bull bar — which was the High-2 entry bar — can continue holding their positions, as the market has now formed strong consecutive bull bars.
- Bears who shorted the bear leg can either exit their positions since the market has formed a strong bull bar, wait for the market to return to their breakeven price, or scale into their position and exit somewhere in between without waiting for breakeven.
- Traders who are not in any position can place a buy stop order at the high of the outside bar.
- Traders who think the market could go sideways and not reach the measured move of the outside bar can enter with half the quantity they originally planned. They can then scale into their position by adding the other half if the market shows good follow-through after the breakout.
- Deeper into the Price Action
- The market is forming bars with overlapping bodies and V-shaped moves, which increases the chances of a trading range.
- After a strong bull trend, the bear reversal attempt was also strong, but the bears failed to get a solid follow-through. Instead, the strong bear leg is now followed by consecutive bull bars, reducing the likelihood of a reversal.
- Patterns
- As the chances of a trading range or breakout mode are high, the market might possibly form a triangle.
- If the bulls manage a successful breakout of the outside bar, they can expect a move equivalent to the height of the outside bar.
The Weekly Nifty 50 chart
- General Discussion
- Traders holding a long position should continue holding, as the market is trading inside a bull micro channel.
- Traders who are not in any position can place limit orders at the lows of bull bars, or they can wait for a pullback and enter on a High-1 or High-2 entry bar.
- There are chances of a trading range, but unless the market forms strong consecutive bear bars, bears should avoid entering short positions.
- Deeper into Price Action
- Even though the market is trading inside a bull micro channel, over the last two weeks it has started closing weak. This increases the chances of a pullback soon.
- Patterns
- The market has given a bull breakout of the bear channel. In general, the chances of a successful breakout increase once the market gives a good follow-through.
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