One pager positional report on NZDUSD

NZD/USD SELL @ 0.8550 CMP stop @ 1.8700 TGT 0-8350 – 0.8200 – 0.8050

                The double top is a frequent price formation at the end of a bull market. It appears as two consecutive peaks of approximately the same price on a price-versus-time chart of a market. The two peaks are separated by a minimum in price, a valley. The price level of this minimum is called the neck line of the formation. The formation is completed and confirmed when the price falls below the neck line, indicating that further price decline is imminent or highly likely.

The double top pattern shows that demand is outpacing supply (buyers predominate) up to the first top, causing prices to rise. The supply-demand balance then reverses; supply outpaces demand (sellers predominate), causing prices to fall. After a price valley, buyers again predominate and prices rise. If traders see that prices are not pushing past their level at the first top, sellers may again prevail, lowering prices and causing a double top to form. It is generally regarded as a bearish signal if prices drop below the neck line.

The time between the two peaks is also a determining factor for the existence of a double top pattern. If the tops appear at the same level but are very close in time, then the probability is high that they are part of the consolidation and the trend will resume. Volume is another indicator for interpreting this formation. Price reaches the first peak on increased volume then falls down the valley with low volume. Another attempt on the rally up to the second peak should be on a lower volume.

            From the above chart NZDUSD reverted from the level of 0.8726 forming double top formation and is nearing the support level of 0.8515 which is the neckline of the pattern and once the neckline is broken below 0.8515 will confirm the trend for the down side move. Currently its trading at 0.8540 level and on closing basis if neckline is crossed will open the door for 0.8350 – 0.8200 – 0.8050 level where the previous bottom will be tested at 0.8050 which was seen in Feb. 2013 where lower level we can wait for. 

One Pager Positional Report on EUR/USD

EUR/USD SELL @ 1.3645 stop @ 1.3950 TGT 1.3250 – 1.2850 – 1.2450 – 1.2050

            The Rising Wedge is a bearish pattern that begins wide at the bottom and contracts as prices move higher and the trading range narrows. In contrast to symmetrical triangles, which have no definitive slope and no bullish or bearish bias, rising wedges definitely slope up and have a bearish bias. Even though this article will focus on the rising wedge as a reversal pattern, the pattern can also fit into the continuation category. As a continuation pattern, the rising wedge will still slope up, but the slope will be against the prevailing downtrend. As a reversal pattern, the rising wedge will slope up and with the prevailing trend. Regardless of the type (reversal or continuation), rising wedges are bearish.

From the above chart it has been seen that EURUSD has fallen from 1.4940 Level in Feb. 2011 and tested the lower level if 1.2040 in July 2012 where in around one and a half year it has drifted by 2900 pips and after the sharp down trend EURUSD moved upside and retraced by 61.8% retracement of the fall and testing the higher level of 1.3995 at point D where closing was seen below 1.3900 level just near the 61.8% retracement which was coming at 1.3820 level. Recently its facing a good resistance at 1.4000 on breakout basis and 1.3900 on closing basis we expect down trend to continue which is seen in last two consecutive days, Initial support of 1.3720 is broken of the first trend line and is nearing the next support of 1.3480 and if the same support is broken then down trend is confirm and it’s expected to test the level of 1.2050. 

It is forming RISING WEDGE pattern formation where height of the wedge from 1.3485 to the support of 1.2040 comes to 1445 pips and we have seen initial breakdown at 1.3720 and next breakdown is seen at 1.3480. Calculating the target fall from beak down of 1.3480 the expected target comes to 1.2035 which is also the previous bottom in July 2012. Till the time EURUSD is below 1.4000 one can expect the level of 1.2050 in medium to long term, where positional trader can enter with sell position with given target of 1.2850 – 1.2050 level around profit booking in phase manner. 

One Pager Positional Report on AUDUSD.

AUD/USD SELL @ 0.9230 stop @ 0.9500 TGT 0.8850 – 0.8500 – 0.8150 - 0.7700

            AUSDUSD after giving breakdown below 1.0010 which was the support trend line of the Symmetrical triangle has tested the support level of 0.8850, where this fall can be considered as wave I of the Elliot wave theory. After testing the support at 0.8850 we have seen a short pullback in price and tested the level of 0.9755 which was 50% retracement of wave I from point of 1.0580 to 0.8850 testing the level of 0.9755. Sharp reversal is seen from the wave II and it’s in the continuation of the wave III, this wave III is in formation and is in inter wave. Currently it’s in inter wave iii where reversal is seen from 0.9460 which has retraced by 61.8% of inter wave i and is in inter wave formation of wave iii where lower side is expected at 0.8400 to 0.8170. This is calculated by a-b-c pattern of 61.8% retracement theory where 0.8400 comes to be the 100% expansion and 0.8170 comes to 121.8% expansion of inter wave i. This level of 0.8170 – 0.8400 will be the completion of wave III in larger wave cycle and will give a short pullback in form of wave IV but not beyond 0.8800 and reversal in price might be seen from 0.8500 – 0.8600 range and will enter in wave V of the downside wave pattern formation.

            Taking the height of the triangle which is from 1.1080 to the bottom of 0.8770, difference of which is coming to 2310 points and breaking below the support trend line at 1.0010 expected target as per breakdown is seen at 0.7700 level in long term. 

USDINR bottom out npt expected below 60per$

USDINR bottom out not expected below 60 per$

NIFTY and BANK NIFTY chart Updates

Bank Nifty April if holds the higher level of 12700 on closing basis will test the lower level of 11500 - 10500 - 9500 on lower side. CMP is 12580 

Nifty is forming Bullish pennant formation after the uptrend and is showing sign of hhigher to and higher bottom formation. if the higher resistance level of 6610 is holding with stop loss of 6640 can wait for lower support of 6520 as first support and further trading below 6520 will confirm the down trend where it will test the level of 6300 - 6220 on lower side. 

One pager report on WTI OIL Positional Buy for 107.5 - 110.75

WTI OIL Buy @ 99.6 CMP Stop @ 98 TGT 102 – 104.5 – 107.5 – 110.75

Looking from the above chart WTI Oil has fallen from the level of 112.2$ and tested the lower level of 91.75$, where after a short pull back in form of profit booking till 100.7$ retested the lower level of 91.40 which has given a formation of Double bottom. This pattern indicated reversal in price and taking a small resistance at midpoint at 100.7 continued the uptrend and tested the level of 105.2$ from where reversal in prices were seen. Generally when the pattern formation is formed and thereafter directional movement is seen it indicates the movement of wave pattern formation, either this might be in the form of a-b-c wave or can show sign of 5 wave pattern formation. Initially we will take it as Elliot wave pattern  of impulsive wave as its just completing the wave (ii) which has retraced by 61.8% of the wave (i) and is showing sign of entering in wave (iii) where we can look at minimum of 107.5 which is 76.4% of wave (i) from bottom of wave (ii), OR might test the level of 110.75 which comes to 100% retracement of wave (i) on higher side. After testing the higher level of 107.5$ to 110.75$ which is near the top of 112.2$ where the market has started falling, slight correction can be expected in the form of wave (iv) and then reenter in uptrend in the Elliot wave pattern formation.

Pattern refers to the wave patterns or formations, while ratio (the relationship between numbers, particularly the Fibonacci series) is useful for measuring waves. To use the theory in everyday trading, the trader determines the main wave, or supercycle, goes long and then sells or shorts the position as the pattern runs out of steam and a reversal is imminent.

·         The Five-Wave Pattern:     In its most basic form the Elliott Wave Theory states that all market action follow a repetitive rhythm of a five waves in the directions of the main trend followed by three corrective waves (a "5-3" move)

·         Fibonacci Price Extensions

Fibonacci price extensions are used by traders to determine areas where they will wish to take profits in the next leg of an up-or downtrend. Percentage extension levels are plotted as horizontal lines above/below the previous trend move. The most popular extension levels are 61.8%, 100.0%, 138.2% and 161.8%.

Rajeev Darji; +91-9820987859 : Blog – rajeevdarji.blogspot.com

Gold Positional Buy for 1936 - 2186 Level CMP is 1358