Market Overview: Nifty 50 Futures
Nifty 50 Micro Double Top on the weekly chart. The market this week formed a bullish bar on the weekly chart, marking three consecutive bullish bars following a weak pullback. The market is now trading within a three-bar bull micro channel and is approaching a sideways movement, while also forming a micro double top pattern. On the daily chart, the Nifty 50 has reached the measured move target from the surprise bar and is now trading within a broad bearish channel. This channel is wide enough to be treated as a trading range.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market is currently in a strong bull trend, with weak pullbacks that are not followed by significant downward movement. Additionally, the bears have been unable to form consecutive bearish bars.
- Traders should avoid selling until the market forms consecutive bearish bars, as the bears have not demonstrated strength through strong pullbacks.
- Traders who missed the high-1 opportunity can consider entering at the opening of the next session, or they can wait for a bullish breakout from the micro double top pattern.
- Deeper into Price Action
- It’s important to remember that for a bearish reversal to occur, the strength of the bearish leg (such as a pullback) should be stronger than the bullish leg.
- In this situation, the bearish leg appears very weak compared to the bullish leg, making the likelihood of a reversal quite low.
- Typically, when a bull trend is as strong as it is in the current chart, the first pullback will be shallow and not very deep.
- Another key point is that after a strong bullish leg, like in the current chart, the probability of a second leg up is higher than the likelihood of a reversal.
- Patterns
- The market is forming a micro double top pattern. A micro double top pattern is similar to a standard double top pattern, but the difference is that the number of bars in this pattern is typically less than or equal to 4 or 5.
The Daily Nifty 50 chart
- General Discussion
- The market is currently trading within a broad bear channel. The channel is so wide that some traders might treat it as a trading range.
- Bears should wait for the market to form consecutive bearish bars to confirm the top of the trading range (the upper trend line of the broad bear channel).
- If the market instead breaks out bullishly from this bear channel without forming consecutive bearish bars, traders should wait for a new bullish breakout to enter buy positions.
- Deeper into Price Action
- Notice that within this broad bear channel, the market has formed both strong bearish and bullish bars. Additionally, the market is trading near the significant round number 25,000, which suggests a likely trading range price action.
- Since the market is operating within a broad bear channel, both bears and bulls have opportunities to profit by selling at highs and buying at lows.
- Typically, price action within a broad channel is volatile, so traders should maintain wide stops to avoid being stopped out prematurely.
- Patterns
- The market had formed a surprise bar (highlighted in red on the chart). This surprise bar was followed by a bullish bar, and the market eventually reached the measured move target of this surprise bar breakout (indicated in brown on the chart).
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
Hi Rishi, Thanks a bunch for sharing Nifty updates. I eagerly look forward to reading these every weekend.
The perspective on index helps me at macro level and it also helps me learning more about Price Action.
PS: Would love to be a part of any discussions around Indian market if something can be worked out.
Thanks Again 🙂
Hi! Glad you find the Nifty updates helpful. Will keep you in the loop for any upcoming market discussions. Thanks for your interest!
Is it possible to have a weekly Zoom meeting for Nifty or Indian stock market discussion?
I believe it would be best to confirm with Richard about the possibility of a weekly Zoom meeting for Nifty, as I’m not sure about it for now.
I cannot thank you enough for giving summary on Indian market particularly Nifty. God bless you.
Thank you for your kind words!