Market Overview: Nifty 50 Futures
Nifty 50 Strong bear close on the weekly chart. This week, the market confirmed it is trading within a triangle pattern and ended with a strong bearish close. Both sides still have equal chances of a breakout, as the overall market remains in a trading range phase. On the daily chart, Nifty 50 is forming a broad bull channel, with this week’s close near the bottom of that channel.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who entered long positions at the opening of this week, due to the failed reversal attempt by the bears followed by three consecutive bull bars, may either hold their trades with a tight stop loss or exit and re-enter once the market gives a bull breakout of the triangle.
- Traders in short positions may continue holding with a stop loss at the nearest swing high.
- Traders who are not holding any positions should wait for a bull breakout and then enter after a strong follow-through.
- Deeper into Price Action
- Strong consecutive closes on one side, followed by strong consecutive closes in the opposite direction, indicate that the market is trading within a range.
- If the bears succeed in a breakout of the triangle, traders can assume the market is in a larger trading range. In that case, once the market reaches the measured move target of the triangle, traders can start looking for long opportunities.
- Patterns
- On a successful breakout, traders can target a measured move up or down based on the height of the triangle pattern.
The Daily Nifty 50 chart
- General Discussion
- Traders in short positions may exit as the market has reached the bottom of the broad bull channel. If the market gives a bear breakout after their exit, they may re-enter on a strong bear close or on low-1, low-2 setups.
- Traders who are not holding any positions should wait until the market either gives a bear breakout or starts reversing.
- Deeper into Price Action
- Looking at the left side of the chart, the market is still trading inside a larger trading range. Since there is significant trading range price action on the left, traders should approach their trades with this in mind.
- In other words, instead of holding trades for too long, focus on quick exits, as sharp reversals are common in trading ranges.
- Patterns
- The market is currently trading inside a broad bull channel. Unlike in a tight bull channel, where bulls have an easier time making profits, here both bulls and bears can structure profitable trades by buying low and selling high, similar to trading within a range.
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