Market Overview: Nifty 50 Futures
Nifty 50 Tight Bear Channel on the weekly chart. The market this week closed strongly bearish and is currently trading within a tight bear channel, showing a bear overshoot. This marks the deepest pullback since the start of the bull trend, and its strength and depth indicate the potential for a reversal. On the daily chart, the Nifty 50 is trading within a bear channel and has shown a strong bearish breakout from the Head and Shoulders pattern with solid follow-through.
Nifty 50 futures
The Weekly Nifty 50 chart
- General Discussion
- The market has experienced a very strong and deep pullback, with the potential to cause a reversal. Traders should avoid taking long positions until the bulls manage to secure a strong bullish close.
- Although the market has shown a significant pullback, the bull trend has not yet ended. Traders may consider short positions, but only as scalp trades rather than swing trades.
- Traders who bought near the all-time high should exit now, as the market is trading below the nearest swing low.
- Deeper into Price Action
- Over the past seven weeks, bulls have consistently failed to form a strong bullish bar on the weekly chart. Meanwhile, bears have successfully formed strong bearish bars with solid follow-through.
- Patterns
- The market has shown a bearish breakout (overshoot) of the wedge. If the bears achieve a strong follow-through bar, there is a high likelihood of the market reaching the 21,100 level.
- Generally, the probability of a bearish breakout of a wedge bottom succeeding is 25%
The Daily Nifty 50 chart
- General Discussion
- Traders holding short positions should wait for the market to reach the Head and Shoulders measured move target.
- Bears who missed selling during the initial bear breakout can wait for the market to approach the high of the bear channel before selling.
- Although the bear channel is broad enough for both bulls and bears to profit, the strong bear trend suggests that traders should avoid entering long positions until the bulls make a strong reversal attempt.
- Deeper into Price Action
- The market is nearing the Head and Shoulders measured move target, so traders can anticipate trading range price action in the upcoming week.
- The last pullback, which included two consecutive strong bull bars, marked the first such occurrence since the start of the bear trend. This increases the likelihood of the market transitioning into a trading range.
- Patterns
- The market has undergone a bearish breakout of the Head and Shoulders pattern, and the measured move of this breakout is calculated based on the pattern’s height
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