Market Overview: Nifty 50 Futures
Nifty 50 Outside Bar Breakout on the weekly chart. Nifty 50 had a strong bullish close this week, continuing the breakout above the 25,000 level. The market also saw a bullish breakout of the outside bar, resulting in a measured upward move based on the height of the bullish bar. On the daily chart, Nifty 50 broke out of the cup-and-handle pattern and is currently trading within a bullish channel.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Overall, the market continues to trade in a strong bullish trend, with no signs of a reversal. Each time the bears have attempted to reverse the market, they have failed due to weak reversal efforts.
- Bulls already holding long positions should maintain their positions until the bears make a strong, convincing reversal attempt.
- Traders who have not yet entered this bull trend can still enter on the current bull bar. Those looking for an entry with a smaller stop-loss can wait for a “high-1” setup opportunity.
- Deeper into Price Action
- Over the past several weeks, the market has consistently failed to form strong consecutive bear bars, which reduces the likelihood of a reversal.
- The chances that the strong bull trend will continue are approximately 60%. If you’re planning to buy with a 1:1 risk-to-reward ratio, you have a positive trader’s equation and should not be overly concerned about the size of the stop-loss.
- Generally, the likelihood of a strong bull trend reversing without forming a second leg up is low. Even if you buy on the current bull bar and the market reverses, you will likely be able to exit at breakeven when the second leg up occurs.
- Patterns
- The market has successfully broken out above the major round number of 25,000, and the bulls have provided strong follow-through to this breakout.
The Daily Nifty 50 chart
- General Discussion
- On the daily chart, the market is trading within a strong bullish channel and is currently near the top of this channel. The channel is broad enough for both bulls and bears to profit by buying low and selling high.
- Since the market is in a bullish trend, traders should focus on taking swing long trades. Meanwhile, bears should prioritize quick exits instead of holding trades for longer swings.
- Deeper into Price Action
- Throughout most of the week, the market formed weak, small bear bars, which were quickly followed by a strong bullish breakout. If the bulls can achieve a solid follow-through, the chances of completing the measured move of the cup-and-handle pattern are high.
- Patterns
- The market is trading within a bullish channel, but the likelihood of a successful bullish breakout from this channel is only around 25%. Therefore, traders should consider entering this bullish breakout on a “high-1” setup after a confirmed breakout follow-through.
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