Market Overview: Nifty 50 Futures
Nifty 50 Bull Breakout on the weekly chart. The market on the weekly chart formed a strong consecutive bull bar this week, resulting in a robust bull breakout of the trading range. This indicates a measured move up based on the height of the trading range. Bears need at least a bear bar (a poor follow-through bar) to invalidate this bull breakout. On the daily chart, the Nifty 50 is trading in a strong bull leg. However, the market formed a strong climatic bull bar near the top of the trading range. If bears produce a strong bear bar, the chances of a failed bull breakout will increase. Since the market has experienced a bull breakout with a strong bull leg, traders can expect a second leg up before any potential reversal.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are already holding a long position should continue holding until the market forms a strong reversal attempt.
- Traders who are not holding a long position can buy at the high of the latest bull bar as the market is already trading in a strong bull trend and also has a pending measured move target to achieve.
- Bears should not sell until the market gives a bad follow-through bar to the bull breakout.
- Deeper into Price Action
- This week, the bulls were able to form a bull bar with the same low and open. This signifies the strength of the bulls.
- This is the first time bulls can form two strong consecutive bull bars since the market had entered the trading range phase. This might be the start of trend resumption if bulls are able to get good follow-through bar.
- Patterns
- After the bull trend, the market had entered into a trading range and now has given a strong bull breakout of the trading range.
The Daily Nifty 50 chart
- General Discussion
- The market on the daily chart has formed a bull climatic bar after a strong bull leg. Traders should wait for the market to form a good follow-through bar before buying.
- As the market has reached the trading range top, bears can short once the bull breakout of the trading range fails and the market forms a strong bear bar.
- Deeper into Price Action
- Usually, the limit order bears place a sell limit order around the trading range top. The assumption is that even if the market gives a strong bull breakout of the trading range, they would be able to exit at breakeven when the price comes again at the breakout level.
- Note that in the above chart, there is a breakout gap. If the market does not come at the breakout level again and instead the next bar is a bull bar, then a lot of bears who sold at the trading range top will unload their short positions. This further drives the market higher.
- Patterns
- The market is forming a breakout gap. If the bulls are able to keep that gap open, then this could lead to a measuring gap measured move up.
- The market has also formed a climatic bull bar. If the bears are able to form a strong bear bar, then traders should expect 2 legs down.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
