Market Overview: Nifty 50 Futures
Nifty 50 Bull Micro Channel on the weekly chart. The market has formed a third consecutive bull bar, continuing the bull micro channel. This week, it also reached the measured move target following the outside bar bull breakout. The market successfully closed above 26,000. On the daily chart, the Nifty 50 is trading within a tight bull channel and has reached the measured move target of the cup and handle pattern.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market is currently in a strong bull trend. Unless there are clear signs of reversal, do not assume the market will reverse. Thinking this way may prevent you from entering a trend like this. Base your decisions on present conditions rather than trying to predict future outcomes.
- Bears should avoid selling at this point, as the market is trading in a bull micro channel. They should only consider selling after a strong reversal attempt.
- Traders who have not yet entered the trend can buy at the market open. Those who prefer smaller stop-losses (and are willing to risk missing the trend) can wait for a pullback and enter on a high-1 setup.
- Deeper into Price Action
- In the last three bull bars, the opening price of each bull bar has been higher than the closing price of the previous one. This indicates a «buy the close» trend, where bulls are consistently buying at every close. Following this trend, you should also consider buying.
- But what if the market reverses after you buy? While this is possible, the chances are high that the market will form a second leg up before any reversal occurs. This means you might have the opportunity to exit around breakeven, reducing potential losses.
- So, when should you exit at breakeven? Let’s break it down with three possible scenarios:
- Market gives a bull close: In this case, continue holding your position as the trade is moving in your favor.
- Market gives a weak bear close: Keep holding your position since a weak bear bar is unlikely to reverse the trend. You might experience a small pullback, so you could consider scaling into your position on a high-1 or high-2 setup.
- Market gives a very strong bear close: If this happens, pay close attention to the next bar. If the following bar is also a bear bar, you should exit near breakeven when the market forms a second leg up. However, if the next bar shows poor follow-through, hold your long position, as this will likely be a weak reversal attempt.
- Patterns
- The market is currently trading within a bull micro channel and has hit the measured move target following the outside bar breakout. Since few bears sold near the measured move, traders should continue holding their long positions.
The Daily Nifty 50 chart
- General Discussion
- The market is trading in a tight bull channel and is currently near the top of the channel. There is room for both bears and bulls to make profits.
- However, since the channel is strong, bears should avoid selling within it, as it is easier for bulls to generate gains.
- The market has reached the measured move target of the cup and handle pattern, so there could be a bear leg forming in the upcoming week.
- Deeper into Price Action
- In recent bars, the market has failed to produce a strong bear bar, which reduces the likelihood of a reversal.
- The market is now trading near 26,000, so traders should anticipate some trading range price action in the coming week.
- Patterns
- The market remains in a tight bull channel. The probability of a successful bull breakout is around 25%, while the chance of a bear breakout is roughly 75%.
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