GOLD_Positional_Bull_Flag_Pattern_Formation

Gold from the above chart is forming a Bull Flag Pattern Formation where it has rallied from the lower level of 680$ and tested the higher level of 1920 and on monthly closing basis was seen at 1825$. After the sharp rise from the lower level of 680 to 1825 Gold went in the consolidation phase where the consolidation was seen from August 2011 till now and is just near the lower support of 1500$ and if this support holds reversal is expected from current price and will move to test higher resistance level of 1790$ and crossover above 1790$ will give a Bull Flag pattern Breakout.

Calculating the Target from the Breakout which is also explained in the Chart where the market has rose from the lower level of 680 testing the higher level of 1825 making a Pole length of 1145$. Consolidation phase was seen between 1800$ to 1520$ which comes to 280 points. If we look at a reversal in price from here can test immediate resistance level of 1790$ and crossover above 1690 on weekly closing will further bring to higher target if 2935; which is the Difference of the Pole (1145) from the breakout point of 1790$.

1.        Sharp Move: To be considered a continuation pattern, there should be evidence of a prior trend. Flags and pennants require evidence of a sharp advance or decline on heavy volume. These moves usually occur on heavy volume and can contain gaps. This move usually represents the first leg of a significant advance or decline and the flag/pennant is merely a pause.

2.        Flagpole: The flagpole is the distance from the first resistance or support break to the high or low of the flag/pennant. The sharp advance (or decline) that forms the flagpole should break a trend line or resistance/support level. A line extending up from this break to the high of the flag/pennant forms the flagpole.

3.        Flag: A flag is a small rectangle pattern that slopes against the previous trend. If the previous move was up, then the flag would slope down. If the move was down, then the flag would slope up. Because flags are usually too short in duration to actually have reaction highs and lows, the price action just needs to be contained within two parallel trend lines.

4.        Break: For a bullish flag or pennant, a break above resistance signals that the previous advance has resumed. For a bearish flag or pennant, a break below support signals that the previous decline has resumed.

5.        Targets: The length of the flagpole can be applied to the resistance break or support break of the flag/pennant to estimate the advance or decline.

Positional Trading calls in Bullions

MCX BUY GOLD APRIL @ 29200 STOP @ 29000 TGT 29500 29800 30200 4/4/2013 11:20

MCX BUY SILVER JUNE @ 50800 STOP @ 50200 TGT 51500 52300 53000 4/4/2013 11:21

Trading Calls update for 12th March 2013 with patern explanation

* Nifty SELL @ 5960 STOP @ 5985 TGT 5935 5905 5880 - 3/12/2013 9:44

NSE SELL Bank Nifty @ 12190 STOP @ 12250 TGT 12110 12050 3/12/2013 9:44

11: 00   INR   Indian Industrial Production (YoY) Actual : 2.4% ; Forecast : 1.2% Previosu :: -0.6% :: Data is supportive for Nifty till the time 5945 holds ,, and crossover aove 5980 is must.. if fail to cross 5980 then trading is expected to be -ve
11:00  INR   Indian Manufacturing Output (MoM) Actual : 2.70% , Previosu : -0.70%

Nifty Morning sell call @ 5960 CMP is 5950 : suport is @ 5945 sustain trading below 5945 it will give a breakdown of Bear flag pattern in intrdya chart from 5988 to 5945 pole and exoected target will below 5905 - 5910  : tgt 2 in our call is 5905 and tgt 3 @ 5880

Bnak nifty sell call @ 12190 cmp is 12085 tgt 2 @ 12050 add tgt 3 @ 11960

L&T which has fallen from 1620 to 1350 has retraced by exact 61.8% of the fall and tested the lvl of 1510 CMP : if Previous suport lvl of 1530 holds selling will start from CMP of 1510 cantest 1360 tgt 1 and then sustain below 1360 can test 1255 121% extensio of fall from recent (today) high

TITAN cmp is 245 spot : its trading in III wave in down sdie rally and in the same its inter wave iii formation where lower side tgt is comming at 225 positional stand is required ,,, ressitance and stop of 262 is advise

Coal India CMP is 319 spot : its foeming Bearish Penant formation where breakdown below 316 will confirm the doen trend : expected target is 280 positional call can be traded in future : resistance is at 325 crossover in spot ... 

Trading calls in Bullions, Positional levels

Positional Call in Bullions

MCX BUY Silver @ 55110 STOP @ 54500 TGT 57000 59000 62000 3/7/2013 10:48



MCX BUY Gold @ 29610 STOP @ 29400 TGT 30100 30800 32000 3/7/2013 11:13

Special Report on Gold Bottom Fishing

Bull Flag Pattern Formation

Bull flag is a sharp, strong volume rally on a positive fundamental development, several days of sideways to lower price action on much weaker volume followed by a second, sharp rally to new highs on strong volume. The technical target is derived by adding the height of the flag pole to the eventual breakout level at point (e).

• Bull flag formations involve two distinct parts, a near vertical, high volume flag pole and a

   parallel,  low volume consolidation comprised of four points and an upside breakout.

• The actual flag formation of a bull flag pattern must be less than 20 trading sessions in duration.

• Most flag patterns occur at the middle of the larger move higher for a stock.

• Upside breakouts often lead to small 2-3% rallies followed by an immediate test of the breakout level.

If the stock closes below this level (now support) for any reason the pattern becomes invalid.

Bulls flags are favored among technical traders because they almost always lead to large and predicable price moves. Like all continuation patterns, bull flags represent little more than a brief lull in a larger move higher. Indeed, in many cases the flag pattern will actually take shape in the middle of the ultimate move higher. Bull flags occur because stocks rarely move higher in a straight line for an extended period, instead, the move higher is broken up by brief periods where traders "catch their breath".

The first part of the flag pattern is often called the flagpole or mast. During this phase the stock price skyrockets to a reaction high (a) on some positive fundamental development. Very often this will be the unveiling of a new product, a favorable legal resolution or positive earnings surprise but the change in price is near vertical as would be sellers are overwhelmed by new buyers caught-up in the euphoria of the moment. As the stock soars speculators that were smart enough to have purchased the stock at lower levels begin selling.

At this point the second phase or flag portion of the bull flag begins. Because the flow of news and investor sentiment is overwhelming positive, most of the stock sold by speculators is easily absorbed in the beginning but as time passes fewer investors seem willing to pay the current price. Slowly, the stock price begins to falter on dramatically reduced volume. The descent is slow because bullish sentiment is still very strong.

Target Calculating:- Hight of the Pole from is 494 (1308 - 1802) and we have seen pattern is just forming where it is reverting from the lower trend line support at 1555 and is just trading at 1580$ level. In immidiate term we expect gold to test the higher resistance trend line at 1790$ and may take a short resistance there and there after crosover will bring to the target of 1825$ which will be rise by 2% of the Price, as per the Bull Flag pattern it will give a short profit booking from higher level and retes the breakout trend line at 1790 – 1800$ level and will again enter in the uptrend. On higehr sdie from the breakout pattern above 1790 adding the pole difference expected target comes to 2285$ on higher sdie which can be seen in medium to long term. On lower sdie there is multiple support seen at 1550 – 1535 range; closing basis on weekly chart below support level will confirm the down ternd to continue which is diffuicult at this point of time. 

USDINR Symmetrical Triangle Pattern Formation breakout @ 55per$

USDINR Symmetrical Triangle Pattern Formation breakout @ 55per$ CMP is 54.15

Triangle formations are corrective patterns that are bound by either converging or diverging trend lines. Triangles are made up of 5-waves that move against the trend in a sideways fashion. These triangles can be symmetrical, descending, ascending, or expanding.

Why is the symmetrical triangle pattern important?

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 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 trend lines defining the triangle. Triangle patterns are usually susceptible to definite and dependable analysis, with the proviso that the investor must wait for a reliable, as opposed to a premature, breakout.

Occurrence of a Breakout - Technical analysts pay close attention to how long the triangle takes to develop to its apex. The general rule is that prices should break out - clearly penetrate one of the trend lines - somewhere between three-quarters and two-thirds of the horizontal width of the formation. The break out, in other words, should occur well before the pattern reaches the apex of the triangle.

To take the measurement, begin by drawing the two converging trend lines. Measure the length of the triangle from its base to the apex. Next, plot the distance along the horizontal width of the pattern where the breakout should take place. If prices remain within the trend lines beyond the three-quarters point of the triangle, technical analysts will approach the triangle with caution.

Measuring the Triangle - To project the minimum short-term price objective of a triangle, an investor must wait until the price has broken through the trend line. When the price breaks through the trend line, the investor then knows whether the pattern is a consolidation or a reversal formation. To calculate the minimum price objective, calculate the "height" of the formation at its widest part - the "base" of the triangle. The height is equal determined by projecting a vertical line from           the first point of contact with the

trend line on the left of the chart to the next point of contact with the opposite trend line. In other words,  measure from the highest high point on one trend line to the lowest low point on the opposite trend line. Both these points will be located on the far left of the formation. Next, locate the "apex" of the triangle (the point where the trend lines converge). Take the result of the measurement of the height of the triangle and add it to the price marked by the apex of the triangle if an upside breakout occurs and subtract it from the apex price if the triangle experiences a downside breakout.

Target Calculation: - Height of the Triangle from point A to Point B is 8.78 (48.55 – 57.33) and we are expecting a breakout above 55 per$ crossover apex, and subtracting the height of the triangle from the apex brings to 63.78 per$ level on higher side in medium to long term. . On lower side support is seen at 52.90 per$; closing below the same will on confirm the down side breakdown which is not expected as the Symmetrical triangle formation is formed after the bull trend which started from 44 per$ and after testing high of 57.33 went under a range bound move.

                On higher side we may look some selling pressure at 57 per$ level which was height of the triangle and 58.7 per$ level where 58.7 per$ is 100% expansion of C – D from point E which is the short term to medium term target.

Great Pound on Breakdown

The Triangle Formation

Triangle formations are corrective patterns that are bound by either converging or diverging trend lines. Triangles are made up of 5-waves that move against the trend in a sideways fashion. These triangles can be symmetrical, descending, ascending, or expanding.
Why is the symmetrical triangle pattern important?

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 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 trend lines defining the triangle. Triangle patterns are usually susceptible to definite and dependable analysis, with the proviso that the investor must wait or a reliable, as opposed to a premature, breakout.

Occurrence of a Breakout:- Technical analysts pay close attention to how long the triangle takes to develop to its apex. The general rule is that prices should break out - clearly penetrate one of the trend lines - somewhere between three-quarters and two-thirds of the horizontal width of the formation. The break out, in other words, should occur well before the pattern reaches the apex of the triangle. To take the measurement, begin by drawing the two converging trend lines. Measure the length of the triangle from its base to the apex. Next, plot the distance along the horizontal width of the pattern where the breakout should take place. If prices remain within the trend lines beyond the three-quarters point of the triangle, technical analysts will approach the triangle with caution.

Measuring the Triangle:- To project the minimum short-term price objective of a triangle, an investor must wait until the price has broken through the trend line. When the price breaks through the trend line, the investor then knows whether the pattern is a consolidation or a reversal formation. To calculate the minimum price objective, calculate the "height" of the formation at its widest part - the "base" of the triangle. The height is equal determined by projecting a vertical line from the first point of contact with the trend line on the left of the chart to the next point of contact with the opposite trend line. In other words, measure from the highest high point on one trend line to the lowest low point on the opposite trend line. Both these points will be located on the far left of the formation. Next, locate the "apex" of the triangle (the point where the trend lines converge). Take the result of the measurement of the height of the triangle and add it to the price marked by the apex of the triangle if an upside breakout occurs and subtract it from the apex price if the triangle experiences a downside breakout.

Target Calculating:- Hight of the Triangle from point A to Point B is 0.3540 (1.3500 -1.7040) and we have seen pattern breakdown at 1.5600 apex and substractin the height of triangle from the apex brings to 1.2060 level on lower side in medium to long term. On lower sdie there is multiple support seen at 1.5250; closing basis on weekly chart below support level will confirm the down ternd to continue and with some minore hickup as profit booking will continue the down trend.