Market Overview: Nifty 50 Futures
Nifty 50 Trading Range Breakout on the weekly chart. This week, the market closed with a small bullish body, indicating a trading range price action on the lower time frame after the high volatility caused by the election results. The market also broke out of the trading range, suggesting a potential upward move to the measured move target of the breakout. Additionally, the market remains within a bullish channel. On the daily chart, Nifty 50 is forming a large expanding triangle pattern and is currently trading near the top of this triangle. The market has also reached the wedge overshoot measured move. Overall, the Nifty 50 on the daily chart has exhibited trading range price action.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market on the weekly chart is trading within a strong bull channel, currently near its upper boundary. This indicates a robust upward trend.
- Traders should avoid short positions due to the narrow width of the bull channel, which limits profit potential and makes entry and exit points challenging.
- Long positions can be maintained unless the market shows consecutive strong bearish bars or breaks below the bull channel.
- For traders looking to enter long positions, the current strong trend suggests a higher probability (around 60%) of continued upward movement.
- In case of a reversal attempt by bears after entry, there is a high likelihood of a second leg up before a potential reversal, allowing traders to exit around breakeven.
- Deeper into Price Action
- Following the bull breakout of the trading range, there is a significant chance that the market will reach its measured move target. Scalpers can consider entering long positions at this level and exit upon reaching the target.
- The presence of a long tail at the bottom of the previous bar indicates low chances of an immediate reversal. Traders should anticipate a trading range rather than a reversal in the current scenario.
- Patterns
- The market is presently within a bull channel, with only a 25% chance of a successful breakout above this channel.
- Additionally, the market has broken out of its trading range, with a 50% probability that this breakout will succeed and achieve the measured move target.
The Daily Nifty 50 chart
- General Discussion
- Bulls who are in a long position can consider exiting around this level. Alternatively, they can wait for a strong bearish close in the market before making a decision to exit.
- Bears can initiate short positions once the market forms strong consecutive bearish bars. Their target could be to hold these positions until the market reaches the middle of the expanding triangle.
- If the market successfully experiences a strong bull breakout of the expanding triangle, bears should refrain from selling. This breakout indicates a potential resumption of the bullish trend.
- Deeper into Price Action
- Due to significant price movements in both directions, traders should anticipate price action within a trading range for the upcoming week. Typically, a highly volatile phase is followed by a period of consolidation and range-bound trading.
- Patterns
- The market is currently forming a large expanding triangle. Given that the market is trading near the top of this pattern, bulls are advised to refrain from buying until there is a clear and strong bull breakout.
- Bears can consider selling once the market begins to show strong consecutive bearish bars.
- Previously, the market had experienced a bull breakout of the wedge top and has now achieved the measured move target of this pattern.
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