Market Overview: Nifty 50 Futures
Nifty 50 Inside Bar on the weekly chart. By forming a small bear bar with short tails on either side, the market gave a weak bear close this week. Overall, a second leg up is more likely given that the weekly chart is trading inside of a wide bull channel following a strong bull leg. There are more chances for a bull breakout of the small bear channel that the market is currently trading inside of on the daily chart.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Bears should refrain from trying to sell the market at this time because it is forming a strong bull leg.
- Because of the bear inside bar that the market has formed, some bear scalpers may decide to sell for a small profit. In a strong bull leg like this, the likelihood of a sell trade being profitable is lower, so scalpers should maintain a good risk to reward ratio.
- Bulls can enter on a high-1 or high-2 buy entry if the market gives a bear breakout of the inside bar because a second leg up is likely to come before a reversal.
- Deeper into the price action
- The bear inside bar has a small body, so it is insufficient to reverse the trend.
- Bulls should wait for a strong bull close to expect the second leg up if the inside bar gets a strong bear follow-through bar.
- The price will be supported by the inside bar measured move, giving bulls a chance to join the bull trend there.
- Patterns
- The market is currently trading close to the big round number (20000), which will serve as a strong price resistance.
- Before the price reverses from this level, it is anticipated that it will first show another leg up.
The Daily Nifty 50 chart
- General Discussion
- On the daily chart, the market is trading in a strong bull trend.
- Market is creating a double bottom with last week’s low. A measured move up could result from a bull breakout of this double bottom.
- Since no strong consecutive bear bars have formed inside the bear channel (illustrated in red), the likelihood of a bull breakout is higher.
- Deeper into price action
- Due to the market’s close by to the large round number, traders should anticipate a few days of sideways price movement.
- Because of how strong the bull trend is, bears will need at least a double top to turn it around. This suggests that before any reversal, traders should anticipate at least a second leg up.
- You’ll notice that there are numerous open bull gaps within the strong bull channel. If bears are able to give a bear breakout of the double bottom, these gaps will act as a magnet for the price.
- The market may create a large trading range equal to the height of the bull channel if it gives a bear breakout of the double bottom (according to market cycle theory).
- Patterns
- Market is forming a bull flag and breakout of which could lead to a measured move up.
- Traders should keep a close eye on the upcoming bars as they will determine whether the market will make a measured move upward or expand into a wide trading range.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
The initial daily chart is showing the weekly chart. Thank you for all the commentary.
Thank you, Shane, for bringing my mistake to my attention. I sincerely apologize for the oversight. I have now made the necessary update to the image of the Daily chart.