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.

               

Diamond Pattern Formation in INDIA NIFTY 50

INDIA 50 Sell below 7550 CMP 7580 Stop @ 7650 TGT 7300 – 7050 - 6650

Diamond top formation

A diamond top formation is a pattern in technical analysis that is used to identify a possible end to an uptrend. This pattern is identified by drawing a line from the peak price to an existing lower high and another line from the highest low price down to the lower low. It ultimately forms a descending channel, but the lines drawn from the last uptrend to the peak and the latest lower low to the lower high takes the shape of a diamond.

NIFTY is forming similar to the Diamond To formation where if sustain trading below 7555 will confirm the breakdown on closing basis and will enter in negative trend. Support trend line is the rising trend line at 7555 and once the level  is crossed next down side will be the previous bottom at 7215 and sustain below the same will bring to 7100 the rising trend line as our first target and if the same support is also broken then will test the next support level at 6650.

Banknifty forming Head & Shoulder pattern formation

Bank nifty Sell CMP @ 15250 stop @ 15800 tgt 14200 - 13200

One Pager Report on AUD/USD forming BAT Pattern Formation

USDINR Positional Report Elliot wave pattern formation

USD/INR Buy CMP 60.1 Stop @ 58 TGT 64 – 68 – 72 – 76 – 80

 The basic pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements. Except for unusual circumstances, price moves in waves and not in a straight-line run. These waves are like the tide coming in. Price advances and recedes, advances a bit more and recedes, slowly creeping up the shore.

            USDINR from the above weekly chart from 30^th November bottom of 39.18 started the rally where it tested the higher level of 52.18 in market 2009 where the top was posted. This was the first wave in the long term uptrend where the rise in price was seen by 13 Rs. After testing the level of 52.18 corrections in the form of wave II was seen and rupee retraced from 52.18 to 43.85 which was 64.07% which was near to 61.8% level, which confirm correction was over and it entered in wave III on 29^th July 2011 which is still in continuation. In the wave III we are looking at the inter wave formation where the inter wave, the formation of wave (iv) is near to over and is entering in wave (v) which is starting from recent bottom of 58.34 level. In the graph it is clearly shown the movement of wave (iv) and the expected wave (v) can retrace by 161.8% of wave (i) which comes to 21.79 points move from 58.34 and can move and test the level of 80.13 level on higher side. This expected level of 80.13 will complete the inter wave (v) and also the completion of wave III in larger wave. Wave III might either close near to 77.83 which comes to 161.8% of wave I or 80.13 which is 161.8% of wave (i) from bottom of wave (iv); where we can conclude wave III in larger wave can come to end near to 78 to 80 range there after wave IV can come in to picture.

            Over here we expect wave IV to retrace by 61.8% of wave I which will test 72 from the higher level of 80.13 and thereafter from the lower level of 72 will enter in the wave V moving and testing the level of 93.03 which is calculated on the basis of 161.8% of wave I from the bottom of wave IV and will halt around that level before entering in corrective formation of A-B-C wave.

o   Rule:

·         Wave III must be 1.5 & 3.5 times Price of wave I; Wave III must be 1 to 4 times the time wise by wave I; Wave II and wave IV usually alternate between

·         Zigzag and Flat. The other alternative is between a Triangle and a Flat. Wave V will usually move beyond the end of wave III.

·         When Wave 5 is extended (more than 161.8% longer than both Waves 1 and 3) a point within Wave 4 will often divide the entire Impulse Wave by 1.618.

·         It is unusual for Wave 5 to travel a greater price or time percentage than Wave 3 traveled in its entirety.

·         One of the Impulse Waves (Waves 1, 3 or 5) generally extends (at least 162% times the next longest Impulse Wave).

·         Wave 5 must move by price more than 70% of wave. (This is not gross movement. Only consider the end points of both 1 and 3 waves.)

One Pager Report on DE30 (DAX)

DAX (DE30) Sell below 9900 CMP 9930 Stop @ 10050 TGT 9300 – 8700 - 8028

 The basic pattern of the Elliott wave principle, how price moves not in a straight line but in a series of rises and retracements. Except for unusual circumstances, price moves in waves and not in a straight-line run. These waves are like the tide coming in. Price advances and recedes, advances a bit more and recedes, slowly creeping up the shore. The outgoing tide shows the wave advance not as far as previous waves, and withdrawing further. The motive phase is composed of three advancing waves, 1, 3, and 5 and counter trend waves 2 and 4. Following the motive wave comes the corrective phase. It shows two receding waves, A and C, with a counter trend wave between, B. The series, 1 through 5 and A through C can be repeated to show how the tide comes in, or price advances up the chart. If you were to zoom in on waves 1 and 2, you would see the same 1 through 5 and ABC combination. You can say the same about waves 3 and 4, 5 and A, B and C (with the structure reversed). In this manner, the cycle is fractal, meaning the closer you zoom in, the more motive and corrective phase combinations you see. If you were to zoom out, say look at the structure from across the room or from the other side of your yard, the 1 through 5 and ABC combination would take shape of waves 1 and 2.

         

   From the above monthly chart of DAX (DE30), it started its rally from 2003 bottom from the lower level of 2190 and continues its rally testing the level of 8150 by year end 2007 December where it formed Double top and in 2008 Circes sharp correction was seen. This was the correction of the rally in the form of wave II and tested the lower level of 3590 which was exactly 76.4% retracement of wave I. after the correction we have again seen the upside move in the form of wave III and in this wave III there are inter wave where in inter wave also wave iii is near to completion. Inter wave I started from 3590 and tested the level of 7600 and from 7600 the correction what we have seen is the wave ii testing the support of 4965, which is 59% retracement of wave I, near to 161.8% retracement level. Wave iii testes the level of 10033 which was 121.8% retracement of wave i and confirming the reversal in the price are expected. Now if recent high of 10033 is holding will enter in wave iv of inter wave and it’s expected to test the level of 8028 which we expect 50% retracement of wave i and holding the high of wave i above 7600 and enter in wave v of inter wave III and completion of wave III can be seen at 12050 which is 100% retracement of wave I from the bottom of  wave II, which is expected in long run where.