Market Overview: Nifty 50 Futures
Nifty 50 2nd Leg Down on the weekly chart. This week, the market closed weakly with long tails on both ends, and it’s currently trading in a narrow bear channel near a swing low that is acting as support. The market has now started a second leg down after a bull trend, and for a successful reversal, the bears need strong follow-through bars. On the daily chart, Nifty 50 is trading in a bear channel. Despite breaking out of a head-and-shoulders pattern, the market has not yet reached its measured move target. If the bears cannot achieve strong follow-through, the likelihood of reaching this target will decrease.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- Traders who are not holding any positions should wait for the next close, as it will likely provide a clear direction for the market.
- If the bears manage to get a strong bear follow-through bar, the chances of the market reaching the measured move target will increase. In this case, traders can consider shorting on a strong bear close.
- If the bulls are able to secure a strong bull close on the next bar, there is a high probability that the market will enter a trading range rather than reversing. In such a scenario, traders should begin accumulating long positions.
- Deeper into the price action
- Notice that the bear reversal attempt contains strong bear bars. If the bears manage to get good follow-through, the chances of a reversal will increase.
- Typically, during a strong bull trend, bulls scale into their positions in various ways, such as buying at the high, at the close, or at the open.
- Many bulls would have entered long by buying at the close of Bar A, and they were trapped when the market gapped down.
- To exit at breakeven, these bulls will scale into their long positions and try to exit at breakeven, which typically means a 50% pullback of the strong bear leg.
- Patterns
- The market is forming an outside bar near the swing low support and is currently trading within a tight bear channel.
- Typically, the chances of a successful bear breakout from a tight bear channel are around 25%, while the chances of a bull breakout are around 75%.
The Daily Nifty 50 chart
- General Discussion
- The market has shown an increasing trading range with strong bull and bear closes, but with limited follow-through on each side.
- Since the market is trading within a broad bear channel, both bulls and bears have opportunities to profit by selling near the channel’s high and low points.
- Deeper into Price Action
- If the bears achieve strong follow-through on the current bear leg, the likelihood of reaching the measured move target will increase.
- Although the initial reversal attempts saw strong bear bars, bulls have recently managed to secure strong bull closes, raising the chances of the market shifting into a trading range.
- Patterns
- The measured move target is near the significant round number of 23,000, which will act as a magnet for the price.
- With the bulls showing increased strength, evidenced by more frequent strong bull closes, the probability of a successful bear breakout from the bear channel remains low.
Market analysis reports archive
You can access all weekend reports on the Market Analysis page.
