Market Overview: Nifty 50 Futures
Nifty 50 Breakout Gap on the monthly chart. The market is currently in a strong bull trend. This month, it achieved a third consecutive strong bull close and is now approaching the wedge overshoot measured move target. In the upcoming week, the market might form a small bear bar due to some profit booking at the wedge overshoot measured move. On the weekly chart, Nifty 50 is trading in a small bull micro channel and has shown a very strong close this week. Since this bull micro channel began after a bear breakout from a tight bull channel, it may simply be part of the larger bull channel.
Nifty 50 futures
The Monthly Nifty 50 chart
- General Discussion
- Traders with long positions should not exit, as the market has not shown any signs of reversal.
- Traders looking to enter this trend can buy at or above the high of the latest bull bar (i.e., August’s monthly bar).
- Selling is not recommended in this strong bull trend. Traders should wait until the market forms strong, consecutive bear bars before considering selling.
- Deeper into Price Action
- As a buyer, you might worry about entering too late in the trend, fearing a reversal that could lead to losses.
- Whenever you face this situation, ask yourself the following questions to gain confidence in your decision:
- Would you sell at this point if you were a seller?
- Is the probability of a reversal more than 50%?
- Has the market shown any climatic movement?
- If your answer to all these questions is «NO,» then you should proceed with buying. Regularly questioning your decisions can provide deeper insights and build confidence in your choices.
- Patterns
- The market has formed a breakout gap that has not been filled yet, increasing the chances of a measured move based on the measuring gap.
- There has been a bull breakout of an outside bar, and the measured move target for this pattern has not yet been reached.
- This month, the market has reached the measured move target of the wedge overshoot pattern. As a result, some profit booking might occur in the upcoming week.
The Weekly Nifty 50 chart
- General Discussion
- The market is currently trading in a bull micro channel and has shown no signs of reversal, so traders holding long positions should continue to hold.
- The market may also be trading within a larger bull channel (indicated by the blue dotted line on the chart). If so, bears can consider taking short positions when the market reaches the top of this bull channel.
- Deeper into Price Action
- For the past four weeks, the market has consistently produced strong bull bars, each closing near its high. Additionally, in recent weeks, bears have been unable to produce consecutive bear bars.
- To better understand the market cycle:
- Imagine the market is trading in a bull micro channel, which eventually experiences a bear breakout.
- At this point, the market is likely to transition into a broader channel, such as a tight bull channel. If the tight bull channel then experiences a bear breakout, it will likely transition into a broader bull channel.
- Finally, after a bear breakout from the broader bull channel, the market will likely enter a trading range.
- Patterns
- The market is trading in a bull micro channel. If the bulls succeed in achieving a bull overshoot of this bull micro channel, it could transform into a larger bull channel (depicted by the blue dotted lines on the chart).
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