Rupee one pager report for target of 63.7 - 67.6 till 59 holds on weekly closing basis

Looking at the above Chart Rupee is forming Bull Flag pattern Formation where it has just tested the lower level trend line and showing sign of reversal and is expected to test the higher trend line of the Flag which is expected at point E at 60.50 per dollar. Sustain closing above 60.50 per $ on closing basis will given a confirmation of the Bull Flag Pattern Breakout. Looking at the Height of the Pole which is from 53.60 per Dollar base to the top of 60.70 per Dollar, difference comes to 7.1 (63.6 - 60.7 = 7.1)

            I am looking a Bull Flag pattern Break out at point E of 60.50 per$ and crossover above the same can add the difference of the pole which is 7.1 bringing to the target of 67.6 per$ in near to medium term. After the break out I am expecting it to take minor resistance at 63.7 per$ and then will move to test the higher level of 67.6 which will be the ultimate target.

Correction might be seen only if sustain closing is seen below 59 per $ on weekly closing and failure of the Bull flag pattern formation which will be void. 

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.     Pennant: A pennant is a small symmetrical triangle that begins wide and converges as the pattern matures (like a cone). The slope is usually neutral. Sometimes there will not be specific reaction highs and lows from which to draw the trend lines and the price action should just be contained within the converging trend lines.

5.     Duration: Flags and pennants are short-term patterns that can last from 1 to 12 weeks. There is some debate on the timeframe and some consider 8 weeks to be pushing the limits for a reliable pattern. Ideally, these patterns will form between 1 and 4 weeks. Once a flag becomes more than 12 weeks old, it would be classified as a rectangle. A pennant more than 12 weeks old would turn into a symmetrical triangle. The reliability of patterns that fall between 8 and 12 weeks is debatable.

6.     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.

7.     Volume: Volume should be heavy during the advance or decline that forms the flagpole. Heavy volume provides legitimacy for the sudden and sharp move that creates the flagpole. An expansion of volume on the resistance (support) break lends credence to the validity of the formation and the likelihood of continuation.

8.     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.

GBPUSD breakdown of Bear Flag Pattern Tgt 1.4405 - 1.3700

Bear Flag is a sharp, strong volume decline, several days of sideways to higher price action on much weaker volume followed by a second, sharp decline to new lows on strong volume. 
The technical target for a bear flag pattern is derived by subtracting the height of the flag pole from the eventual breakout level at point (e). 
Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification.

Bearish flags are comprised of higher tops and higher bottoms. "Bear" flags also have a tendency to slope against the trend. Their trendlines run parallel as well.

• 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.
• 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.
• 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.
• 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.

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.

Looking at the chart GBPUSD is trading below the critical support of 1.5115 and is expected to give a sharp continuation of down trend from current level. If the resistance of 1.5200 is holding and sustain trading is seen below 1.5000 will continue in negative trend where on lower side it will move and test the lower level where it can test the level of 1.4400 and 1.3700 support level.  It has given breakdown at 1.5115 where point E is expected to test and sustain trading below 1.5050 will confirming the down side breakdown of the Bear Flag Pattern. Height of the Pole is 1420 Pips (1.6250 – 1.4830). Immediately it is expected to test support at 1.5050 and Bear flag pattern breakdown is expected at same level. Sustain trading below 1.5050 will bring lower level target of 1.3700[(1.6250-1.4830)-1.5115] height of the Pole from the Breakdown point of 1.5115 level.

This is the previous sell call which was published on 7^th June and above report is the continuation of the same with further lower targets and the level are expected to be seen in medium to long term. 

http://rajeevdarji.blogspot.in/2013/06/gbpusd-one-pager-report-bear-flag.html

L&T positional Chart for 845 & 481 Target CMP is 1345 Stop @ 1500

L&T is forming A-B-C pattern where point C has retraced by exactly 61.8% of A-B indicating top out was seen at point C. As per the pattern 100% Fibonacci Expansion of A-B From C comes to 481 level which I expect L&T to test in Medium to Long term. As per the pattern down side target is expected to be tested by last quarter of 2014.

It has also given a breakdown of the channel in which it was trading from Dec 2011 onward forming a Bear Flag Pattern which has given breakdown at 1385 and confirming the down trend. Height of the pole is  1080 and Breakdown is seen at 1395 level. If we take 50% of the pole height as the target then it comes to 540 points and breakdown below 1385 with 540 points will come to 845 level on lower side

Symmetrical Triangle Pattern Breakout in USDINR for target of 63.3 - 65.27

Trading Call: Buy at the level of 60.3 Stop Loss of 58.8 Target of 63.3 – 65.27 levels.

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 trendlines defining the triangle.

1. Occurrence of a Breakout - Technical analysts pay close attention to how long the triangle takes to develop to its apex. The general rule, as explained by Murphy, is that prices should break out - clearly penetrate one of the trendlines - somewhere between three-quarters and two-thirds of the horizontal width of the formation.6 The break out, in other words, should occur well before the pattern reaches the apex of the triangle. . Adherence to this rule is strongly advised by Yager, She adds that the closer the breakout occurs to the apex the higher the risk of a false breakout.

2. Price Action - Unlike ascending and descending triangles which give advance notice of their intentions, the symmetrical triangle tends to be a neutral pattern. Murphy advises that the symmetrical triangle is generally a consolidation pattern. This means an investor can look to see the direction of the previous trend and make the basic assumption that the trend will continue. However, many experts advise investors that because the breakout direction could go either way that they wait until the breakout occurs before investing in or selling the stock. Schabacker refers to a symmetrical triangle as a "picture of hesitation.

3. 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 trendline. When the price breaks through the trendline, 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 trendline on the left of the chart to the next point of contact with the opposite trendline. In other words, measure from the highest high point on one trendline to the lowest low point on the opposite trendline.

Both these points will be located on the far left of the formation. Next, locate the "apex" of the triangle (the point where the trendlines 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.

For example, working with a symmetrical triangle, assume the highest high of the pattern occurs at 100 and the lowest low at 80. The height of the pattern is 20 (100 - 80 = 20). The apex of the triangle occurs at 90. The pattern has an upside breakout. Using the measuring rule, the target price is 110 (90 + 20 = 110).

4. Duration of the Triangle - As mentioned before, the triangle is a relatively short-term pattern. It may take up to one month to form and it usually forms in less than three months.

5. Forecasting Implications - Once breakout occurs, the symmetrical triangle tends to be a reliable pattern. Bulkowski calculates failure rates ranging between 2% and 6% for symmetrical triangles after a valid breakout.

To avoid mistaking a false move for a valid breakout, experts advise waiting a few days to see if the breakout is dependable. According to Murphy, minimum penetration criteria would be a closing price outside the trendline and not just an intraday penetration. Investors do have time once a breakout has occurred.18 According to Bulkowski, when considering symmetrical triangles, an investor will have over five months to reach the ultimate high after an upside breakout and less than half that time after a downside breakout

Because premature breakouts (where prices close outside of the trendline) are so common, don't dismiss the pattern if it has experienced such a breakout. According to Bulkowski, however, "premature breakouts do not predict the final breakout direction or success or failure of the formation."

USD/INR, working with a symmetrical triangle, the highest high of the pattern occurs at 57.3 and the lowest low at 48.60. The height of the pattern is 8.7 pips (57.3 – 48.60 = 8.7). The apex of the triangle occurs at 54.60. The pattern has an upside side breakout. Using the measuring rule, the target price is 63.3 (54.60 + 8.7 = 63.3).

With the above move it is also showing A-B-C Pattern Formation where it is expected to test 161% expansion of A-B from point C which comes to 65.27 levels. Point A is at 48.60 & Point B is at 57.30, point C at 51.34 has given retracement of 61.8% of the rise and confirming the upside target. Taking 161.8 % Fibonacci Expansion of the A to B from the point C, comes to higher level of 65.27 which can be seen in near term.

I maintain buy call from the previous report generated at 55.10 breakout for target of 59.75 which is achieved and still expect it to move higher. On lower side support of 58 is not expected to be broken and will continue the uptrend.

Previous report of buy was published on 23^rd May 2013 can be seen on following link: http://rajeevdarji.blogspot.in/2013/05/trading-call-buy-at-level-of-55.html

Reliance Symmetrical triangle breakdown @ 784

Reliance Symmetrical triangle breakdown @ 784 Height of the triangle os 104 poionts and sustain trading below 784 will bring to 680 target in near to medium term.

resistance is seen @ 810 CMP is 792

Fitch says China credit bubble unprecedented in modern world history

China's shadow banking system is out of control and under mounting stress as borrowers struggle to roll over short-term debts, Fitch Ratings has warned.

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

"The credit-driven growth model is clearly falling apart. This could feed into a massive over-capacity problem, and potentially into a Japanese-style deflation," said Charlene Chu, the agency's senior director in Beijing.

"There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is, and this undermines signalling," she told The Daily Telegraph.

While the non-performing loan rate of the banks may look benign at just 1pc, this has become irrelevant as trusts, wealth-management funds, offshore vehicles and other forms of irregular lending make up over half of all new credit. "It means nothing if you can off-load any bad asset you want. A lot of the banking exposure to property is not booked as property," she said.

Concerns are rising after a string of upsets in Quingdao, Ordos, Jilin and elsewhere, in so-called trust products, a $1.4 trillion (£0.9 trillion) segment of the shadow banking system.

GBPUSD One pager report (Bear Flag Pattern Formation)

Bear Flag is a sharp, strong volume decline, several days of sideways to higher price action on much weaker volume followed by a second, sharp decline to new lows on strong volume. 
The technical target for a bear flag pattern is derived by subtracting the height of the flag pole from the eventual breakout level at point (e). 
Even though flags and pennants are common formations, identification guidelines should not be taken lightly. It is important that flags and pennants are preceded by a sharp advance or decline. Without a sharp move, the reliability of the formation becomes questionable and trading could carry added risk. Look for volume confirmation on the initial move, consolidation and resumption to augment the robustness of pattern identification.

Bearish flags are comprised of higher tops and higher bottoms. "Bear" flags also have a tendency to slope against the trend. Their trendlines run parallel as well.

• 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.
• 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.
• 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.
• 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.

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.

Looking at the chart GBPUSD is trading near the critical resistance at 1.5680 and is expected to give a sharp reversal from current level. If the resistance of 1.5700 is holding and sustain trading is seen below 1.5500 will enter in negative trend where on lower side it will move and test the lower trend line where it can test the level of 1.5050 support level where point E is expected to test and sustain trading below 1.5050 will confirm the down side breakdown of the Bear Flag Pattern. Height of the Pole is 1420 Pips (1.6250 – 1.4830). Immediately it is expected to test support at 1.5050 and Bear flag pattern breakdown is expected at same level. Sustain trading below 1.5050 will bring lower level target of 1.3600[(1.6250-1.4830)-1.5050] height of the Pole from the Breakdown point of 1.5050 level.