One Pager Report on NIFTY forming Rising Wedge Pattern

India 50 (Nifty50) Sell @ 7980 Stop @ 8100 TGT 7200 – 6700 - 6070   

                India 50 (Nifty 50) since 2014 May has been trading in the side way to upside moving channel and making higher high and with five consecutive high and rising support have formed the Pattern formation of Rising Wedge pattern. This pattern is still in the formation stage and only break below 7700 will confirm the down trend. Though once can take a pre decisive move and enter at current price which is near 8000 and also at the rising trend line where it has always reverted from. Suppose this pattern holds true and market trade below 7700 in September by 2^nd week then we might look at the profit booking which might drag soon the market to minimum of 6660 as first support and then the level 1 target of 6070 on lower side. Height of the wedge from 7620 to 6660 is 960 points and break below 7700 will bring to support of 6740 as first support, Level I which I have taken a rise from 5990 to 7620, difference comes to 1630 points and break below 7700 target comes to 6070 as second support. Level II which I have taken from 5105 to the top of 7620 where the difference comes to 2515 points and break below 7700 bring to the target of 5185 which will be at the strongest support where value buying might comes in picture for enter in long term buying with support of 5100 was seen in August 2013.

1.        Prior Trend: In order to qualify as a reversal pattern, there must be a prior trend to reverse. The rising wedge usually forms over a 3-6 month period and can mark an intermediate or long-term trend reversal. Sometimes the current trend is totally contained within the rising wedge; other times the pattern will form after an extended advance.

2.        Upper Resistance Line: It takes at least two reaction highs to form the upper resistance line, ideally three. Each reaction high should be higher than the previous high. Lower Support Line: At least two reaction lows are required to form the lower support line. Each reaction low should be higher than the previous low.

3.        Contraction: The upper resistance line and lower support line converge as the pattern matures. The advances from the reaction lows (lower support line) become shorter and shorter, which makes the rallies unconvincing. This creates an upper resistance line that fails to keep pace with the slope of the lower support line and indicates a supply overhang as prices increase.

4.        Support Break: Bearish confirmation of the pattern does not come until the support line is broken in a convincing fashion. It is sometimes prudent to wait for a break of the previous reaction low. Once support is broken, there can sometimes be a reaction rally to test the newfound resistance level. Volume: Ideally, volume will decline as prices rise and the wedge evolves. An expansion of volume on the support line break can be taken as bearish confirmation.

One Pager Report on DE30 (DAX indices) Positional target 8500 - 8150

DE30 (DAX) Sell 9535 @ 94 Stop @ 9770 TGT 9200 – 8900 – 8500   

             

            DE30 is showing formation of AB = CD where point C has retraced by 61.8% of AB. Where point A at 10043 to point B at 8903 w, retraced by 61.8% at 9600 and is showing the sign of reversal. If we consider (1:1) movement then point D must teste minimum of 8500 level where the 100% expansion theory will be completed. If we consider 127% of AB then we may get the level of 8150 on lower side. If the theory holds true and fails to trade beyond 71.6% which comes to 9720 then we can wait for lower target as per the theory.

The Principle is that AB is the impulsive wave in the market, BC is the retracement of AB and will usually be a 61.8% (.618) retracement of AB but should not exceed a 78.6% (.718) retracement of AB. If it exceeds 78.6% te AB = BC pattern is negated. CD will then be the next wave and be equal to AB (1:1) or be a 1.27 or 1.618 extension of AB. So when trading, you look for the chart patterns which have performed the ABC formation and plot exit point D which will be equal to AB of be a 1.27 or 1.618 extension of AB.

What Is an ABCD Pattern?

Reflects the common, rhythmic style in which the market moves. A visual, geometric price/time pattern comprised of three consecutive price swings, or trends—it looks like a lightning bolt on price chart.       A leading indicator that helps determine approximately where and when to enter and exit a trade. Why Is the ABCD Pattern Important?

                Helps identify trading opportunities in any market (forex, stocks, futures, etc.), on any time frame (intraday, swing, position) and in any market condition (bullish, bearish, or range-bound markets). All other patterns are based on (include) the ABCD pattern. Highest-probability trade entry is at completion of the pattern (point D). Helps to determine the risk/reward prior to placing a trade. Convergence of several patterns—within the same time frame, or across multiple time frames--provides a stronger trade signal. 

WTI OIL one pager forming Symmetrical Triangle pattern, Near bottom support area

WTI OIL is showing sign of Symmetrical Triangle Pattern Formation where its near the lower support level at point ‘e’ around the level of 92.55$ and once this support of 92.55$ - 92$ holds reversal is expected in WTI Oil where on higher side falling trend line resistance is seen at 104$ where as crossover above the same will confirm the breakout of the pattern. If we take breakout at 104$, Expected target as the height of the triangle comes to 130$ on higher side. We expect small profit booking on the way to test the target of 130$. 

Bank nifty Rising Wedge and trend reversal ..

Rising wedge formation : height 15900 - 13860 = 2040 points , expected breakdown @ 14950 and after the breakdown the next target down side will be 12910 level. 

Gold Symmetrical Triangle Pattern Formation

Gold Buy @ 1279 Stop @ 1230 TGT 1350 – 1425 - 1527

Gold is showing sign of Symmetrical Triangle Pattern Formation where its near the lower support level at point ‘e’ around the level of 1273$ and once this support of 1270 – 1273$ holds reversal is expected in gold where on higher side falling trend line resistance is seen at 1320 and 1350 where as crossover above the same will confirm the breakout of the pattern. If we take breakout at 1320$, Expected target as the height of the triangle comes to 1527$ on higher side. We expect small profit booking on the way to test the target of 1527$. 

Generally, a triangle pattern is considered to be a continuation or consolidation pattern. Sometimes, however, the formation marks a reversal of a trend.

Symmetrical triangles are generally considered neutral, ascending triangles are bullish, and descending triangles are bearish. From a time perspective, triangles are usually considered to be intermediate patterns. Usually, it takes longer than a month to form a triangle. Seldom will a triangle last longer than three months. If a triangle pattern does take longer than three months to complete, Murphy advises that the formation will take on major trend significance.

A symmetrical triangle pattern is relatively easy to identify. In addition, triangle patterns can be quite reliable to trade with very low failure rates. There is a caution concerning trading these patterns, however. As mentioned previously, a triangle pattern can be either continuation or reversal patterns. Typically, they are continuation patterns. To achieve the reliability for which the triangle is well known, technical analysts advise waiting for a clear breakout of one of the trendline defining the triangle. Volume is an important factor to consider when determining whether a formation is a true triangle. Typically, volume follows a reliable pattern: volume should diminish as the price swings back and forth between an increasingly narrow range of highs and lows. However, when breakout occurs, there should be a noticeable increase in volume. If this volume picture is not clear, investors should be cautious whether pattern is a true triangle.