Market Overview: Nifty 50 Futures
Nifty 50 Breakout Fail on the weekly chart. The market closed weakly this week, forming a candlestick with a long upper tail and a small body. During the week, the bulls attempted to reach the all-time high by breaking above the previous swing high and the bull channel. On the daily chart, the Nifty 50 has started to reverse after hitting the measured move based on the previous leg. Now, the bears are trying to counter the strong bull leg and push for a reversal.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders holding long positions may continue to hold until the bears manage to form a strong bear follow-through bar.
- Traders holding short positions can continue to hold but should maintain a tight stop loss, as the all-time high level acts as a strong magnet.
- Traders without any open positions should wait for the next close before entering. If the market forms a strong bear bar, they can consider entering a short position, assuming the market is moving within a trading range. However, if the market closes with a strong bull bar, traders should wait for a breakout above the all-time high before entering a long position.
- Deeper into Price Action
- The market usually begins to show trading-range behavior when it trades near a significant level. In this case, that key level is the all-time high.
- Patterns
- The market has given a bull breakout of the bull channel. Generally, there is only a 25% chance of a successful bull breakout from a bull channel.
- If the bulls are able to get strong follow-through bars, the likelihood increases that this move will lead to a measured move up based on the height of the channel.
The Daily Nifty 50 chart
- General Discussion
- Traders who entered short positions near the measured move target should continue holding until the market starts forming consecutive bull bars.
- Traders still holding long positions may hold with a tight swing low or exit once the bulls fail to resume the trend on a high-1 or high-2 signal.
- Deeper into Price Action
- The market has almost reached the measured move target based on the height of leg-1 and also the measuring gap.
- This week’s bull run was also a bull breakout attempt of the large trading range within which the market has been trading.
- Patterns
- The market is still trading outside the range, so if the bulls manage to reverse on a high-1 or high-2 setup, traders can expect a measured move up based on the height of the large trading range.
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