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Nifty 50 – Outlook on the Price Action setup and Trapped Market Participants

Sometimes Human mind is so biased that it misses the big picture and simply focuses on the unimportant minor details. That’s the case with Nifty 50, as the Index prices are falling from last couple of days, most of the traders and analysts are paying too much attention to these minor fluctuations. Many have ignored what’s going on in higher time frame price action. Take a look at the 4h chart of Nifty 50.

Nifty 50 – Price Action Setup on 4h chart

Nifty 50 - Price Action forms pullback setup in 4h chart

When you see the 4h chart, it’s obvious to notice that Nifty is in uptrend since Feb 19. It has rallied from 10600 to 11800 within the duration of 2 months. As I pointed out in the chart, the trend has given multiple pullbacks and retracements for trend traders to capitalize on.

In comparison to the trend, the recent fall in Index prices is just another pullback, that’s what I highlighted in the black box on chart. As most of my regular readers and clients already know, I won’t take any stance or predict what will happen next. Simply put you can’t predict the markets, even if you did, a good prediction doesn’t mean good profits. Instead I will just watch the price action of this pullback setup in upcoming days and initiate trades based on my observation.

The most interesting aspect of this setup is that, there are some market participants (probably weak hand players but I think there’re some big fishes too) who are trapped with long positions. If the pullback fails then I guess all these trapped participants will liquidate their positions at an unfair price. Two possibilities exist right now for Nifty 50; the pullback might become a successful setup which could lead prices to higher levels or else the pullback might fail that can result in trend termination.

This is an interesting setup in Nifty 50, so keep an eye on the 4h chart and take trades based on the resulting price action.


Trading Predator

About the Author:

Balaji is a Speculator, Investor and Trader (All in All!!!) and self published author. Trading in the Markets since decade, have seen more ups and downs along with institutional trader's lifestyle. He usually trades Nifty, Bank Nifty, Commodities, Futures cum Options around both Indian and global Markets. Balaji applies highly analytical and systematic Price Action strategies He blogs passionately about Trading strategies, Price Action Trading, Technical analysis, Macro events, Market setups, Financial and Economical topics. Apart from Trading and Blogging, Balaji also mentors aspiring Traders and Investors on becoming successful in highly competitive financial Markets.

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