Nifty Technicals - Will it Solve the Mystery???

CMP : 4360

 

Last Friday's unusal celebration makes me think about the contrarian side and this time very badly about

indian stock markets.Also operators targetted the reliance badly for the past three days. They treated

reliance very badly and on friday immediately reliance becomes their pet. Looks more unusal. I personally

feel that its a big game of operators to squeeze the shorts of small traders.

 

Where this market is going to move?  It is quit difficult for me to come up a decision. So I tried

analysing all the hourly,daily,weekly charts of nifty to come up with my conclusion.

 

Infterence from Hourly Charts :

 

Last Friday close in nifty above 4360 made a breakout signal in Nifty hourly charts but its rsi level is not

imressive because its RSI level spikes immediately from 20% to 60% which shows only a small uptrend is

left as per nifty hourly charts. And 200MA(hourly) EMA is currently at 4385. So as per hourly charts strong

resistance in 4385-4395 zone. And as per this chart maximum upside is possible upto 4440 for this week.

 

Inferece from Daily Charts :

 

So I try to figure out Nifty Daily Charts. Looking at daily nifty charts there is not conclusive buy or sell signals.

Slow Stocastic look more confused with huge number of crossover indicating a confustion. And MACD is just

crossing zero indicating a sell signal as per daily charts. And Also Nifty Closed Just above my favorite indicator

20 day EMA(4356). So if any of the day left closed below 4356 will definitely indicate a strong reversal. And as per

Daily Nifty Charts resistance are coming nearly 4400.

 

Inferece from Weekly Charts :

 

Nifty CMP : 4360

Atlast coming to Weekly Charts indicating only Strong Reversal.Slow Stocastic is showing strong reversal

and also Nifty weekly charts closed below 20EMA for the second week continiouly. And weekly resistance

coming near 4431- 4447 range And also i try to analyse some its constituents like Reliance, L&T, ICICI, SBI,

HDFC, Reliance Communication, BHEL. Almost all the stocks are below 20 EMA except BHEL. And BHEL

is currently in the mood to fill the gap formed near 1600 range. So overall Nifty Weekly Charts are indicating

a Strong Reversak Pattern with falling Stocastic Indicator.

 

 

Conclusion:

 

So by concluding all these things for the current week we are limited upto 4440 range in upside with

sequence of resistance at 4385,4400,4440. If we are able to sustain above that then we can see 4600-4800 levels

in coming months And Now this time iam gonna believe oStrongly on Nifty Weekly Charts rather than try beliving

on Daily and Hourly Charts. Just taking some longer duration charts.

 

1)And if we try breaking 4250 for the third time then i sure we are gonna reach 4000 kind of level and

even lower targets are possible.If you note currency markets Yen appreciates from 110.50 to 108.50 and rupee depriciate from 42 to 44. During june same thing happens and by that time crude Shots up heavily.In short rupee should not depriciate and Yen should not aprreciate But unfortunately both happens at the same time.And Market will explaining the effect.To know what happened last June try visit
Yen - Rupee Currency Mismatch and Selling in Indian Market

 

2) If we are able to move above 4440 then it suggest that crude is going to fall below $112/barrel because

operators targeted Reliance without any reason and cairn is moving little in negative direction. And Reliance

upmove about 3%  close on last friday looks quite unusual.

Let See How this twist ends.
Happy Trading!!!

 

Regards,

Rajandran R

Auhor - Marketcalls

 

Updated Hourly Charts

Nifty nearing 200 MA(4351) - Check the blue line - which currently act as a strong resistance. I we are able to cross on closing basis then chance of a new uptrend. Else to see 4159-4200 levels.

Nifty Hourly Charts Indicating Further Downtrend

CMP : 4335

 

Nifty Hourly Charts Indicating a strong downtrend Channel. And this time possibly Nifty may test 4156-4200 levels.

 

 

Iam not too much bearish on nifty stocks.Because for me it looks like a well manipulated game by the operators to slide the Nifty well above and outside trendline as shown and to move the market up from there. And Chance of reversal anywhere between 4156-4200 levels should be used as a buy on dips investing strategy.One should be highly bearish only if nifty dips below the trendline.
Till then Nifty remains a pure buy rating.

Nifty, Nifty Constituents and Escape Velocity

Nifty : CMP 4327.47

 

Nifty Did it. Ya it takes nearly 24 trading sessions to make the candlestick to close exactly

well below 20 day EMA(4385) but this time nifty closed with a little positive note. In my

perspective A candlestick to close below 20 day EMA and remain closed well below 20 day

EMA will definitely invoke a short term downtrend in case of nifty. But As Usual nifty trying to

confusing traders and investors with its little boost.

 

Click the charts to get maximized

In Physics there is a concept called Escape Velocity , It is commonly described as the speed

needed to "break free" from a gravitational field.If an object attains escape velocity, but is not

directed straight away from the planet, then it will follow a curved path. This is the concept used

in rockets to make it free from gravitational Field and to revolve around the orbit. And Now in

case of nifty the gravitational pull is downwards as its closed below 20 day EMA.

 

Currently nifty is facing a downward gravitational force(remember if a ball thrown upwards 

then the ball will take a curve path and fell down because of gravitatinal force. And it

will falls to the ground due to lack of Escape velovity).So nifty now needs an escape velocity

that is a force which needs to keep nifty above 4327 forever. The predicted nifty escape velocity is

4385 ie (>20 day EMA) to put nifty once again in its orbit. In any case if nifty closes below 4385

then once again nifty is poised to the gravitational pull and the acceleration is going to be strong

further to reach its ground soon.

 

In Simple terms Market has to remain close above 4385 by tommorow. Some of the stocks that

can offer the escape velocity to nifty :

 

 

Top Gears in Nifty:

 

RANBAXY,RELIANCE,BHEL,INFY,HDFC,ONGC: Still these counters are not giving up as its candle are

still manage to stay above 20 day EMA. Strong Escape Velocity may come up from these counter.

And Ranbaxy,HDFC,BHEL looks the most bullish among them. And Remember ranbaxy already

achieves its escape velocity(>20 day EMA).

 

Slow Gears in Nifty

 

SBI,ICICI Larsen & Tourbo, DLF : Situation is exactly the same as of Nifty. Candles closed well below

20day EMA. If these counters closed positive on coming monday(25th, Aug,2008) then chance of

formation of bullish morning star - a bullish trend revesal pattern. So a positive close in these

counter can offer further escape velocity to nifty. In case of SBI almost a DOJI symbol is formed

so any positive close will bring a trend reversal - Bullish morning doji pattern in this counter.

 

Dead and Broken Gears in Nifty

 

ACC,RCOM,TATA STEEL : Tradning well below 20day EMA for couple of days and considered to be

the weakest stocks among the nifty constituents.

 

Conclusion

 

Almost all the stocks in the nifty are well below the oversold in term of stocastic Indicator, showing

a sparking positive momentum. This spark may be enough to keep the nifty rocket to moving into its

orbit once again. Just hope for the spark to give some escape velocity to the nifty rocket.

Regards,
Rajandran
Author - Marketcalls

Chart Analysis from AlphaTrends

Watch the latest videos on YouTube.com

IDFC Near Supports

 

CMP : Rs 92

 

Check out the IDFC Descending Triangle Pattern. Once again trading near supports(Rs 90)

And Still the stock is looking bearsih and now the stock likely to break only above Rs102.

 

Here is a view from Ashwani Gujral told on 4th Aug,2008

 

IDFC has support at Rs 88-89: Gujral
Technical Analyst, Ashwani Gujral is of the view that IDFC has support at Rs 88-89.

Gujral told CNBC-TV18, "At Rs 88-89 IDFC is standing right at a support. In case this level goes, then you probably are looking at levels of about Rs 60 so this is a sort of a level from where it bounced back a number of times. On the upside it really needs to cross Rs 115-117 to gain some more strength."

 

Check the previous view in IDFC here : Descending Triangle Pattern in IDFC

GTL Infra Charts and 50 day Stoch RSI

GTL 3 Years Charts Updated with 50 day Stock RSI indicator showing

Oversold levels. Now Just Predict You self  Where it would move.

 

Nifty 3 year Charts and 50 day Stock RSI

Nifty CMP : 4283

 

Check out the earlier signals from Stock RSI which is currently at

oversold levels - 85.2. Stoch RSI showing a clear Earlier signals Before every Meltdown in Nifty. Investors are requested to remain cautious as we break the major future support levels 4378 and 4311. Every Rise could be used as a oppurtunity to sell. Traders can concentrate on September Nifty Shorts as the expiry is nearing.

 

Supports : 4250 and 4162 few bouce backs can be expected at these level and Nifty Upside limited to a maximum upside of 4508 before a breakdown journey

 

Fundamental Pick : Pidilite Industries

Stock : Pidilite Industries

CMP : Rs 142

Target : Rs 175

Time Frame : 4-5 months

Returns : more than 20%

 

Pidilite is the leader in all its major product categories viz., construction adhesives,art material
products, industrial pigments/resins. The company is taking the inorganic  route to aggressively

grow its presence in the international markets which presently accounts for 8% of the revenues.

 

 

The Buy call is Simply Based on the ROE. Return on Equity which is simply more than 20% every

Year for this Stock. Technically speaking the stock popped out just above the investors buying range

and also above 20 day EMA.

 

Gain is Slow and Steady. Fundamental players can stick to it!!

 

Arbitrage opportunity in Ranbaxy

 

Ranbaxy Spot Price : Rs499.1

Ranbaxy Aug Futures : Rs499.5

Ranbaxy Sep Futures : Rs366

Lot : 800 shares

 

Ranabaxy if providing good Arbitrage opportunity as it is highly discounted in September futures.

Providing a Riskless money making from Ranbaxy. Before that its good to know about the reverse

cash - futures arbitrage. Have a look at it.

 

Reverse Cash – Futures Arbitrage

 

Sometimes, the stock futures trade at a discount to its underlying spot prices. Such opportunities

arise when the demand for a stock is more than its supply. In such cases, if one holds such stock,

one can buy the same in futures market and sell it simultaneously in spot market, earning a risk free

return + temporary funds from the sale proceeds of the stock. The position can be reversed when the

differences converge, or on the expiration day of the futures contract, when the prices in spot market

and futures market are bound to converge.

 

 

Possible Ways of Doing it

 

1) Sell Ranbaxy in Cash at @ Rs499 and Buy SEP Futures  @ Rs 366 which is highly discounted from the spot price( nearly 130 pts)

2) Sell Ranbaxy in Aug Futures @ 499 and Buy SEP Futures @ 366

 

Stay with the Ranbaxy Arbitrage till the Discounts are narrowed with the Spot Price

 

 

 

 

Buy : Satyam Computers short term Pick

Stock : Satyam Computers

CMP : Rs 413

Target : Rs 440 and 468

Time Frame : 1-2 months

Stop Loss : Rs394

 

 

Trading Strategy:

 

This stock showing  bullish signals and with good average delivery volumes above( 20 day delivery volumes are well above 40%.). And trying to sustain above 20 day EMA for the past 6 trading sessions. To trade this stock just grab it dips with a minimum stop loss well below 20 day EMA whic comes around Rs404. And Rs394 would be a good Stop loss. Satyam having strong supports near 409. And can bounce upto 61.8% which is the fibonacci retracement level and current resistance level for satyam computers. Once the resistance breaks then we can go for higher targets. Satyam looks like a good and safe trading bet in current market scenario.

 

 

Rajandran

Author Marketcalls

Trying to Decode Forex Charts

I just Try to decode the Forex Charts and then started collected some information
and got confused myself.

USD-EUR 2 Year charts

Click the Charts to get enlarged


USD-JPY 2 Year charts

Click the Charts to get enlarged


USD-INR 2 Year charts

Click the Charts to get enlarged

 

All most all the analyst are saying that US dollar will collapse anywhere between September 2008 to December 2008

And also recent days i notices something anonymous and odd thing happening in forex markets. I was very confused

to solve this. And some thing saying to my heart that some thing anonymous going to happening around us in global

financial markets

 

Here I had included 2 years charts of USD-INR , USD-YEN, USD-EUR Forex Charts. If you look at these charts then

it will be witnessed that USD-YEN and USD- EUR charts showing highly overboughtlevels almost all the TA indicators

are indication at present and also USD-EUR Charts are indiacting the same.But the odd thing is  USD-INR is  currenlty

in oversold levels. And you can also witnessed an sudden and odd behaviour in all these charts

 

Lindsey Williams in his video says that US current national debt is more than 8 trillion dollars. And 1 trillion

dollar added last 18 month alone. And he adds that Oil runnup in commodities markets and increasing nations debt

will lead to US dollar Collapse.

 

And here is the Lindsey williams speech before 2 months ago

 

The Dollar Crisis VS Oil Prices-1 of 2

 

The Dollar Crisis VS Oil Prices-2 of 2

 

The Energy Non-Crisis by Lindsey Williams Part 8 of 8

 

 

And some More analyst Videos I collected

 

THE ECONOMY WILL COLLAPSE THIS SEPTEMBER 2008!!! (PART 1)

 

THE ECONOMY WILL COLLAPSE THIS SEPTEMBRE 2008!!! (PART 2)

 

THE ECONOMY WILL COLLAPSE THIS SEPTEMBRE 2008! (PART 3)

 

 

And Here are the Odd Forex and Commodity Data's from Last friday 8th Aug,2008

 

1)Friday is one of the day the Dollar is having its best day since July 2005 with a gain of 1.167%.

 

2)The euro fell the most in almost eight years.

 

3)The Russian ruble fell by the most in 2 1/2 years against a dollar-euro basket.

 

4)Light, sweet crude for September delivery lost $4.03 to $115.99 a barrel.

 

5)Gold futures for December delivery fell $16.30, or 1.9 percent, to $861.60.

 

6)Silver futures tumbled more than 5% to 2008 lows.

 

And my question is "Is all these data signalling a end to a worry or a runnup before a worry

 

 

And My Question Is

What All these things Lead to?

Is really american economy is getting improving or they are creating a mirage?

If there will be a collapse then what would be the effect on Global Markets and Indian Markets?

Or Easing Crude Oil is one of the factor for all these Oversold levels in USD-JPY or USD-EUR and is it a end to the dollar crisis worry?


Economic Experts Please Clear me on this issue

Global Imbalance - An imminent Dollar Crisis

Here is an intresting Lecture by CA M.R. Venkatesh, Chennai Part of INDIA RE-DISCOVERED A Seminar on Global Economy By SWADESHI JAGARAN MANCH and VISION INDIA TRUST. I recommend my member to go through this 57 min video.



This video informs people on M3 number, oil bourse, inflation and the way the world economy works. It is true that these things are not discussed in the media nor is it taught in schools. The end result is that everyone is ignorant when it comes to talking about the global economy. M.R. Venkatesh does an outstanding job to discuss these points, and every economist & reporter should be discussing this plain and simply for the benefit of the people rather than telling people coverup stories. If anyone has intelligence and wants to know what is going on, go and look up M3, iranian oil bourse, inflation and try to understand yourself, its easy!

Testing Week for Nifty

Nifty CMP : 4529

 

Still everyone is saying that it is a bear market rally. But the Global situation improves far better

than previous days. Also Our market discounting all the negative factors even in this oversold zone

and still holding its hard earned gains.

 

Some Positive Factors

 

1) Dow Rallied 300 pts last friday

2)Crude Oil Fells to $115/barrell

3)SGX Nifty Closed at 4595

4)Yen Weakens to 110/Dollar

5)Rupee Weakens to Rs41.95/Dollar

 

But Currently Nifty is facing some intermediate resistance near 4613 where the 20 day EMA and

200 day EMA merges as witnessed from the weekly charts. Monday likely to be a testing day

for the bulls to close above the 20 day EMA. And Tuesday is IIP no's are going to be released

so IIP no's are going to decide the direction of the market. Sentiment may remain cautious in the forthcoming week, as the market regulator Securities & Exchange Board of India (Sebi) meets on 13 August 2008 to review the rules relating to issuance of Participatory Notes (PNs) by foreign portfolio investors, which it had revised in October 2007. A review of securities lending & borrowing mechanism, know your client (KYC) norms for FIIs and status on launch of currency futures are likely to be discussed in the meeting.

 

This whole week is going to be the testing week for the nifty to remain sustained above 4613

 

Regards,

Rajandran

Author - Marketcalls

 

Jai Corp - The Video Game Starts once again

Stock : Jai Corp

CMP : 380

Targets : 450 and 600

 

Jai corp is one of the Buzz word of 2007 and here is a story about it have a look at The Jai Corp Story before

tracking this intresting stock This stock mostly have a gap up opening in bull markets and gap down opening

in bear markets. Circuits are its favorite word

 

So How to Trade Jai Corp?

 

Stock showing close just below 20 day EMA(Rs 399.2) . Stocks Highly oversold and trying to panic the investors. So a necessary pullback should happen with in 1-2 days to start its bull run once again. So Carefully watch this stock and try to grab it at the end of the day.Also try to grab this stock if it opens in upper circuit. And dont forget to reject this stock if it closes below 20day EMA.

in upper circuit. And dont forget to reject this stock if it closes below 20day EMA.

 

The Message is clear buy above 400 is the mantra

 

 

 

Unitech : Ascending Triangle Pattern

Stock : Unitech

CMP : 176

Targets upgraded to 220 - 240

Stock Already Recommeded at 157 here and at 153 to to our sms susbcribers

 

Short Term Views

 

Short term technicals says that stock can move atleast 10% from present level if it hold above 176.

Also Ascending triangle pattern formed in the charts are giving us more and more conforming signals

that this stock will shine for the next week. Weekly charts technicals says that a nice pull back can

extend upto 205-210 in one or two weeks.

 

Check out the unitech previous recommedation here

 

http://www.marketcalls.org/2008/07/unitech-at-deal-will-it-get-through.html

 

Charateristic of Ascending Triangle Pattern :

 

1. Security within the context of an uptrend traces an orderly price decline from a swing high much like a pullback buy. The price then rallies up to the prior swing high and stalls. A second pullback occurs as overhead resistance is decreased and the stock then forms a higher swing low. This occurs over and over again until a series of equal swing highs and higher swing lows is formed.

2. The power of an ascending triangle can be greater after a powerful upside move due to the possible increase of underlying support.

3. Ascending triangles can be stronger when the swing high that begins the pattern is also an all time high due to the possible lack of overhead resistance.

 

 

 

 

 

 

Say Happy Birthday for the Baby Bull

Longterm Trendlines which act as resistance are broken after jan Crash
for the first time on 5th Aug.... Its looks like 15th August for Me....

Nifty's  next target of 4720 - which is the 61.8% retracement from the recent low of 3780 which showed in the chart
Nifty will achieve its target without hesitation... Easy go

Long Live the Bull.

Breakout possible in IPCA Laboratories

Stock : IPCA Laboratories

CMP : 560

Reasons
1) Stock Above 20 day EMA
2) Stock breakout after huge consolidation and Heavy Volumes
3) Leading Indicators MACD and RSI are increasing
4) OBV Rising - stocks are being accumulated

 

All these signalling a breakout is possible in IPCA Laboratories

 

Nifty Trading Near Major Resistance : Is the Party Over?

Nifty Spot Price : 4395

 

Here is the Chart for Nifty the tredline showing that we struck at major

long term resistance.Just see the trendline as shown in the picture

http://rajandran.googlepages.com/NiftyView.jpg

 

Upside is possible only if we are able to cross above 4444 which Looks like the Mantra as of Now.And if breaks then then Nifty can move upto the range 4680 and 4740.Market will turns if Nifty bearish if we falls and close below 4261 which is a 20-Day EMA line.

 

Investors are once again requested to remain cautious and try to have a close look on the markets for next few days.

 

Stay away from Banks, Infrastructure as of time being both the sector is not looking good.

One and only chance of recovery is Drastic decrease in Crude Oil.
But Right Now Crude is having buy signal so worry in shor term
if we close below the 20 Day EMA 4261. Any close below the 20 Day
EMA we are heading down.. Down

But Remeber One thing Still Nifty is in buy zone and can do any
sort of magic. Closing below 20 Day EMA is a worry

Till Then We are going to move in accordance with the global markets

 

Regards,

Rajandran R

Updated News :

Oil falls $4 after weak US spending report.
So Still Its Party Time in Nifty...

[b]More Updated Views before the market hours : [/b]
US Dada Dow trading below 20 day Ema likely to form symmetric triangle pattern.

Any gap down opening is panic global alert. And recovery above 20 day Ema .. Rally in our markets what do you say?

Markets waiting for FED signal.

Tech Check and Nifty Comparision.

Stock : IDFC
Cmp : 97
Max upside : 103
Fresh breakout only above 107.

Bearish pattern as said in my yesterday's posting.

Stock may wipe it gains in 3-4 days and would get into sell mode for a
target of 78.

So a possible comparìsion with nifty - nifty to remain bullish for 3-4
days and then giving oppurtunity to buy your favorite stocks.
Now all my eyes on 4680-4740 range. Selling is expected to come from banks and realty. And
almost all the stocks are trading above the 20day EMA buy zone.

Also SesaGoa too looks bullish for 3-4 days and likely a sell from day
5 onwards.
Both IDFC and SESA GOA
Stock will be in my radar for next 15 days.

Its time to take notes guys.
Lets see how the patterns really spans out.
Regards,
Rajandran

Article posted via my Sony Ericsson Mobile - K510i

Summary about the performance of the stocks the way it behaved

 

These are our Positive and Negative Views about the stocks which recommended in the for the month of July,2008

And here is the summary about the performance of the stocks the way it behaved.

 

1) Pullback is possible in Aban Offshore - Recommended at Rs 2614 for a pullback upto 3000 and it did a maximum target upto 2926

 

2) Break out in Reliance Capital from Downtrend - Recommended Near 1128 and this stock did a maximum of 1433

 

3) Bartronics Short term Buy - Recommended Near 159.5 for a target of 176 and goes to a maximum upto 185

 

4) Short Wipro for 350 Target - recommended to short sell below 400 for a target of 350. It went to a maximum downslide upto 335

 

5) Pullback and Dropdown in Aban Offshore - Once again recommended @ 2600 to short in rise went to maximum upto 2835 and then downslide to maximum low of 2404

 

6) Container Corporation of India (CCI) : Medium term Pick - Recommended near 775 for a target of 900. Stock went to maximum of 870 and still recommending a hold

 

7) Delisting in Ingersoll Rand ? - Stock Recommended to our group near 364 for a target of 500. Stock recommended to sell at 411 on every rise.

 

8) Karuturi Gloabl : Investors Stock Pick : Recommended near 23.80 for a target of 27 and 28.  Target 1 achieved and went upto 28.20 still a hold for Target 2

 

9) Everest Kanto Cylinders : A Multibagger in Your Portfolio : Recommended at 259 for a target of 750. Stock is still a hold and currently trading near 312

 

10) Unitech - AT&T Deal will it get through? : Unitech Recommended Near 153 and still a hold. Stock Currently trading near 169

 

 

 

 

 

 

Symmetrical Traingle Patterns in Bata India

Stock : Bata India

CMP : Rs 157

Breakout above : 160

Target : 200-240

Time Frame : 2-3 Months

 

As of Now Bata India Stock Showing Positive Signs for the formation of Traingle Breakout for a price target

of Rs200- 240 in short span of time say 2-3 months with great support lying at 140. If this  stock fails to sustain above 140 then once more pattern is possible in Bata India i.e If this stock is not able to sustain above 140 then there is a Chance of formation of Symmetric Traingle Breakdown Patterns in Bata India with a price target of 100

Almost all the Tech Indicators are showing positive and bullish sign as of now and likely to have a positve breaout

above 160. So try to accumulate this stock with stop loss near or just  below 140. Also this stock has been recommended to our smsgupshup members at Rs 153.

 

 

Characteristics of Symmetrical Traingle Patterns

Extracted from : StockCharts

 

The symmetrical triangle, which can also be referred to as a coil, usually forms during a trend as a continuation pattern. The pattern contains at least two lower highs and two higher lows. When these points are connected, the lines converge as they are extended and the symmetrical triangle takes shape. You could also think of it as a contracting wedge, wide at the beginning and narrowing over time.

While there are instances when symmetrical triangles mark important trend reversals, they more often mark a continuation of the current trend. Regardless of the nature of the pattern, continuation or reversal, the direction of the next major move can only be determined after a valid breakout.

1. Trend: In order to qualify as a continuation pattern, an established trend should exist. The trend should be at least a few months old and the symmetrical triangle marks a consolidation period before continuing after the breakout.
2. Four (4) Points: At least 2 points are required to form a trend line and 2 trend lines are required to form a symmetrical triangle. Therefore, a minimum of 4 points are required to begin considering a formation as a symmetrical triangle. The second high (2) should be lower than the first (1) and the upper line should slope down. The second low (2) should be higher than the first (1) and the lower line should slope up. Ideally, the pattern will form with 6 points (3 on each side) before a breakout occurs.
3. Volume: As the symmetrical triangle extends and the trading range contracts, volume should start to diminish. This refers to the quiet before the storm, or the tightening consolidation before the breakout.
4. Duration: The symmetrical triangle can extend for a few weeks or many months. If the pattern is less than 3 weeks, it is usually considered a pennant. Typically, the time duration is about 3 months.
5. Breakout Time Frame: The ideal breakout point occurs 1/2 to 3/4 of the way through the pattern's development or time-span. The time-span of the pattern can be measured from the apex (convergence of upper and lower lines) back to the beginning of the lower trend line (base). A break before the 1/2 way point might be premature and a break too close to the apex may be insignificant. After all, as the apex approaches, a breakout must occur sometime.
6. Breakout Direction: The future direction of the breakout can only be determined after the break has occurred. Sound obvious enough, but attempting to guess the direction of the breakout can be dangerous. Even though a continuation pattern is supposed to breakout in the direction of the long-term trend, this is not always the case.
7. Breakout Confirmation: For a break to be considered valid, it should be on a closing basis. Some traders apply a price (3% break) or time (sustained for 3 days) filter to confirm validity. The breakout should occur with an expansion in volume, especially on upside breakouts.
8. Return to Apex: After the breakout (up or down), the apex can turn into future support or resistance. The price sometimes returns to the apex or a support/resistance level around the breakout before resuming in the direction of the breakout.
9. Price Target: There are two methods to estimate the extent of the move after the breakout. First, the widest distance of the symmetrical triangle can be measured and applied to the breakout point. Second, a trend line can be drawn parallel to the pattern's trend line that slopes (up or down) in the direction of the break. The extension of this line will mark a potential breakout target.

Iam very Eager to see about the breakout in this stock. Your views about this stock and the pattern here are

welcome.

 

Regards,

Rajandran R

Author - MarketCalls

 

SesaGoa : Very Simple Short Term Target

Buy: SesaGoa
CMP : 3483
Target Range : Rs 4000-4300
Time Frame : 3-4 Days
EX Bonus/Spit Date : 08-AUG-08

Resistance : 3934

Descending Triangle Pattern in IDFC

Stock : IDFC

CMP : 97.5

 

 

IDFC is showing a deceding Traiangle Pattern in IDFC. Maximum target can extend anywhere upto 100-103

Breakout looks possible only above 107. But the downside is looking dangerous and may extend upto 78.

So beware of this stock if you are holding this stock. Strong Supports near 90. Please view the sample chart as shown below.

 

Charactersitic of Decending Traiangle Pattern

 

With descending triangles, trend lines converge with a horizontal trend line for lower support, and a negative sloping resistance trend line.

Descending Triangles offer a clearer picture of potential breakouts. Since the lower support level is horizontal below, and upper support is descending downward, the pattern suggests that the stock trend is still bearish and the breakout will likely be bearish

 

Updated Nifty View

Looks Nifty Moving Beyond 4600. If nifty closes below 4244 then supports are at 4203, 4164 and 4077

And Failing to close below 4077 then 3800 is possible.

Aurobindo Pharma Ltd : Short Term Pick

Stock : Aurobindo Pharma Ltd

CMP : 278

Target : 310 and 325

Potentail Upside : 10-15%

 

 

This Stock is currently at oversold zone. Yesterday this stock recovered from the low of 272 with heavy

volumes. Expecting a potential runup in this counter for 10-15% i short term. Call also given to our

smsgupshup members marketbits.

 

 

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