Market Overview: Nifty 50 Futures
Nifty 50 Outside Bar Fail on the weekly chart. Overview The market closed strongly bullish on the weekly chart this week. This marks the second consecutive outside bar (first a bearish outside bar, followed by a bullish one), increasing the likelihood of trading range price action for the upcoming week. On the daily chart, Nifty 50 is trading near a wedge top and the significant round number of 25,000. A bull breakout from a wedge top is less likely than a bear breakout, so traders can anticipate that this wedge top might transition into a trading range if a bear breakout occurs.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market is currently experiencing a strong bull trend with no signs of a reversal. Despite attempts by bears to initiate a reversal, the bear outside bar did not show significant follow-through.
- Bulls holding long positions should continue to do so until the market forms consecutive bear bars.
- Bears looking to sell should avoid taking swing positions. Instead, they may consider scalp short positions and lower the time frame of their charts to identify prominent short opportunities.
- Since the overall trend remains bullish, traders wishing to enter the market can consider buying at the high of the bull outside bar. Alternatively, they can wait for a high-1 opportunity.
- Deeper into Price Action
- The market has formed two consecutive outside bars of different types: a bear outside bar followed by a bull outside bar. This indicates a trading range price action, suggesting that some range-bound movement can be expected in the upcoming week.
- If the market experiences a bull breakout from the bull outside bar and then quickly reverses, bears may take short positions and aim to exit near the bottom of the bull channel.
- Last week, the market reached the measured move target of the large outside bar (indicated in brown), leading many traders to exit their long positions and causing a strong bear bar. However, the lack of new short positions from bears was confirmed by the subsequent strong bull outside bar.
- Patterns
- Currently, the market has formed a bull outside bar. If a bull breakout occurs, traders can anticipate a measured move target based on the height of this outside bar.
The Daily Nifty 50 chart
- General Discussion
- Traders holding long positions should continue to do so until the market shows a strong bear breakout of the wedge top.
- Those looking to enter the bull trend should wait for a clear bull breakout of the wedge top before taking positions.
- Traders can consider shorting the market near the upper trend line of the wedge top, which is the current trading area. Alternatively, they can wait for a bear breakout of the wedge top to initiate short positions.
- Deeper into Price Action
- In recent days, the market has started forming strong bear bars with follow-through, signaling that traders should prepare for a potential bear breakout of the wedge top.
- Additionally, there has been an increase in poor follow-through on the bull bars, as they are often followed by small or large bear bars. This pattern suggests the likelihood of an upcoming trading range.
- Patterns
- The market is currently trading in a wedge top. The probability of a bull breakout from this formation is around 25%, while the chance of a bear breakout is approximately 75%.
- The price is fluctuating around the significant round number of 25,000, indicating that traders can expect a trading range price action in the upcoming week
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