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Nifty 50 futures positive gap acting like magnet

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Market Overview: Nifty 50 Futures

The Nifty 50 futures positive gap acting like magnet with market still being in an expanding triangle, but started with a new bear channel in the daily charts, finally market gave a breakdown of a wedge.

Nifty 50 futures

The Weekly Nifty 50 chart

Nifty 50 Weekly Chart Futures Positive Gap Acting as Magnet
  • General Discussion
    • Increasing bearishness near the top of the expanding triangle
    • If you notice 2nd bar opened below the close of the 1st bar.
    • This tells us bears are slowly starting to sell the closes
  • Deeper into the price action
    • Bar 1 gave an bear doji close near top of the expanding triangle, this doji formed just after a bull close which clearly shows bulls losing control.
    • Bar 2 is a very good follow-through bear bar closing near it’s low.
    • Bulls also know this and why Bulls would start exiting from their longs and bears would be adding to their shorts
  • Patterns
    • Expanding Triangle still intact
    • Positive gap acting like a magnet, which means lower prices are more probable.
  • Pro Tip
    • Ever wondered how can you buy low sell high in a trading range?
    • What you can do is start selling closes near top of the trading range and start buying closes near bottom of the range.
    • This would give a good entry point and a better Risk to Reward rather than entering on stop orders

The Daily Nifty 50 chart

Nifty 50 Daily Chart Trapped Limit Order Bears
  • General Discussion
    • Market approaching support
    • Trapped bears who bought on bar 1 looking for exit
    • Bulls able to get only 1 bull close in the whole week
  • Deeper into price action
    • Many Bears sold the high of bar 1
    • Bears sold there assuming market would reverse as it was also an resistance area (clearly seen to left on chart in green)
    • Many bears knew they were trapped so they scaled in their position on the inside bar close i.e. bar 2
    • Following this, the next bar gapped down as the bears started selling the close of the inside bar
    • Bears who wanted to exit on breakeven on first entry still not able to exit, as market did not go a tick below their breakeven price
  • Patterns
    • Market breakdown below a weak wedge
    • Wedge overshoot failed and started reversing down again in a bear channel
    • The reversal down after the Wedge overshoot fail is not so strong, bear bars are too small to convert bull trend to bear trend
    • Probably the best bears would get is a trading range (may be a big trading range in future is expected)

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