Market Overview: Nifty 50 Futures
Nifty 50 Bull Channel on the weekly chart. The market on the weekly chart closed with a bearish candlestick. The bear bar has a small body with small tails on either side. The market is trading near the top of the bull channel, and this week it nearly reached the trading range breakout measured move target. The Nifty 50 on the daily chart is showing increased trading range price action. Currently, it is trading near the top of the expanding triangle pattern.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market is currently trading near the top of a bullish channel. However, due to the channel’s tight nature, it is challenging for bears to profit from selling near its upper boundary.
- Bulls should be aware that the market has achieved the measured move target of the trading range breakout. Therefore, it would be prudent to await a minor pullback before considering new long positions.
- For those currently holding long positions, it is advisable to maintain them unless the market shows a strong bearish signal, such as a significant bearish bar within the bull channel.
- Deeper into Price Action
- Recent market activity reveals a growing number of bars with small bodies and noticeable tails. This pattern signifies an expanding trading range in price action.
- The proliferation of small-bodied bars during this bullish trend indicates a high probability of either a small trading range or a minor pullback occurring soon.
- Additionally, as the market approaches the measured move target, many bulls are likely to exit their long positions, thereby intensifying selling pressure.
- Patterns
- The market is currently confined within a narrow bullish channel. Statistically, there is approximately a 25% chance of a successful bull breakout and a higher 75% chance of a successful bear breakout.
- Should the market experience a robust bearish breakout from the bullish channel, it is more likely to transition into a trading range rather than undergo a full reversal.
The Daily Nifty 50 chart
- General Discussion
- Bears can initiate new short positions when the market forms consecutive bear bars near the top of the expanding triangle.
- Bulls who are not currently in a long position should wait for a bullish breakout of the expanding triangle pattern.
- Bulls currently holding a long position can consider exiting either now or when the market begins forming consecutive bear bars.
- Deeper into Price Action
- The market has started showing an increasing number of bars with tails. This type of price action often precedes a trading range.
- Typically, after a highly volatile phase, markets tend to enter a less volatile phase characterized by a trading range.
- Patterns
- The market continues to trade within the expanding triangle pattern. Currently, it is near the pattern’s upper boundary and forming a trading range.
- Currently, the market is in breakout mode while within a trading range. This situation suggests a 50% chance of a successful bull breakout and a 50% chance of a successful bear breakout.
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