Market Overview: Nifty 50 Futures
Nifty 50 Outside Bar on the weekly chart. This week, the market on the weekly chart has shown a strong bearish close. The market failed to achieve a successful bullish breakout above the previous swing high. After a bearish breakout from the tight bull channel, the market has now moved into a broader bull channel and is currently trading near its high. Bears can sell at the current levels, while bulls should wait for the market to reach the bottom of this bull channel. On the daily chart, Nifty 50 has experienced a strong bearish breakout from the tight bull channel and dropped below the significant round number of 25,000. There is a high probability that the market will reach the bottom of this tight bull channel. Traders should anticipate a range-bound price action as the market is currently trading around this key level.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market is currently trading in a bull channel and is near the top of this channel, providing an opportunity for bears to take short positions.
- Bulls should wait for the market to form consecutive bull bars again to confirm a continuation of the trend or consider initiating long positions near the bottom of the bull channel.
- Overall, the market remains in a strong bull trend. Traders should focus on taking swing long positions and scalp short positions. Bears, in particular, should aim to close their positions once their target or stop-loss is achieved rather than holding them as swing trades.
- Deeper into Price Action
- The bulls produced a strong bull bar but failed to achieve a solid follow-through with consecutive bull bars. As a result, many bulls who bought at the close of the breakout bar are now trapped.
- If the market forms another bear bar, these trapped bulls will likely start exiting their long positions (i.e., selling short), adding more downward pressure to the market.
- Many bears will short at the close of the current bear bar, believing that the bull breakout was actually a bull trap. However, if the market instead forms consecutive bull bars, bears should consider exiting their trades and taking long positions, as this would signal a resumption of the bull trend.
- Patterns
- The market has formed a strong outside bar. If the bears manage to break out below this outside bar, the market could move further down to its measured move target
The Daily Nifty 50 chart
- General Discussion
- Bulls who entered during the bull breakout above the significant round number of 25,000 may consider exiting their long positions, as the market has experienced a strong bearish breakout from the tight bull channel.
- Bears can initiate short positions, targeting the bottom of the tight bull channel.
- Alternatively, bears can partially close their short positions at the low of the current bear bar and add to their short positions on a “low-2” (the second leg down).
- Deeper into Price Action
- After the bearish breakout of the tight bull channel, bulls attempted to turn it into a failed bearish breakout, but the bears managed to achieve two strong consecutive bearish bars.
- As the market is still trading near the significant round number, traders should anticipate a range-bound price action for the upcoming week.
- Patterns
- Given the strong bearish breakout of the tight bull channel, and with the market already reaching the midpoint of this channel, there is a high probability that this will develop into a trading range
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