June 26, 2010

  • The line chart is showing a broadening bottom formation
  • This pattern has 2 possibilities.
  • First one the price will break the two supports i have mentioned and test the bottom line of the broadening formation and then a major reversal.
  • Second possibility may start from next week. Price tested the upper trend line and has come down to the middle portion of the pattern it may reverse from here to break the upper trend line.
Thanks to Yelnick for sharing my chart with his readers: CLICK HERE TO SEE NIFTY CHARTS IN YELNICK'S BLOG

BEARISH ENGULFING

Pattern explanation:
The Bearish Engulfing Candlestick pattern occurs at the end of an uptrend so it is know as a Bearish reversal pattern, This pattern is a combination of two candles. The first candle is a small bullish candle and the second candle is a large Bearish candle.

Pattern Psychology:
As the trend before the formation of a bearish engulfing is uptrend the buyers gets excited on seeing the bullish candle and the next day they give a gap up, but the price starts to fall and finally closes below the opening of the previous day. This clearly shows that the bears are stronger than bulls.

And one important thing in any candlestick pattern analysis is to consider the price action before a pattern formation and the price action after the pattern formation. Most of the candlestick pattern needs price confirmation before entering a trade.
BEARISH ENGULFING IN S&P 500




  • Hindustan Petroleum has given a break out from a cup and handle pattern.
  • Now it should trade above 423 and a daily close above 423 will target 619. The target is based on the cup and handle pattern.
UPDATED CHART
  • GTL INFRA as expected gives a gap up on monday. it did so with good volume increase.
  • The only negative point to note here is the bearish candlestick pattern.

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DAILY CHART
WEEKLY CHART

DAILY CHART

  • GTL Infra breaks out above 42.
  • in daily line chart it seems to have broken out of a triangle pattern with target of  59.
  • One can keep stop loss of below 42 for going long.
  • weekly chart also shows a daily and weekly close near previous closing prices levels of 45 and 46 are important for the upward momentum to continue
HOURLY CHART

DAILY CHART
DAILY LINE CHART

  • The only positive chart shown above is the hour chart which has closed above the channel resistance line. But that too need follow up price move on monday for confirmation of a reversal.
  • The second chart shows price trading clearly below 50 and 200 day moving averages.
  • The third channel shows the possible support and resistance lines. for next week 10050 should act as a support closing below this would trigger larger correction.
  • 10250 is the bulls area closing above 10250 and trading above 10300 would turn it in favour of the bulls.
CLICK THE CHART TO ENLARGE
  • EUR/USD is getting some upward momentum.
  • I have shown a four hour chart of the pair.
  • The level to watch out is 1.2426 an hourly close above this level is important. of course the pair has to reach their first.

Disclaimer

All the contents of niftychartsandpatterns are for educational purposes only and are not Investment Advice or recommendations offered to any person(s) with respect to the purchase or sale of the stocks / futures. Niftychartsandpatterns shall not be held responsible for the actions of individuals, parties, or corporations taken in response to the ideas, thoughts, concepts or information presented in this blog. Hence all the visitors are requested to apply their prudence and consult their financial or investment adviser before acting on any of the Ideas in this blog.

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My Favourite Quote

"All through time, people have basically acted and reacted the same way in the market as a result of: greed, fear, ignorance, and hope. That is why the numerical formations and patterns recur on a constant basis."
—Jesse Livermore