This is the 49th Day course in a series of 60-Days called “Technical Analysis Training”
You will get daily one series of this Training after 8 o’clock night (Dinner Finished)
Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)
Pennant Bullish Chart Pattern
Implication
A Pennant (Bullish) is regarded a bullish signal, showing that the existing uptrend may proceed.
Description
A Pennant (Bullish) pursue a sharp, or basically vertical rise in cost, and consists of 2 converging trendlines that form a narrow, tapering flag shape. The Pennant shape generally appears as a horizontal shape, rather than one with a downtrend or uptrend.
Following are important characteristics for this pattern. Trendlines
For Pennants, the amount trendlines choose to converge. At the beginning of the Pennant, the amount spikes, probably in answer to a beneficial items or income declaration. Implementing the amount spike, the amount variations continue until they taper out and become decreasingly less fickle. This attitude appearance on a amount chart with the initial amount spike creating what technical analysts refer to as the “mast” of the Pennant, observed by a triangular pennant profile.
Volume
As the Pennant develops, the volume appears to reduction. Martin Pring ideas in his publication, Technical Analysis Explained, “a pennant is in effect a very small triangle. If anything, volume tends to contract even more during the formation of a pennant than during that of a flag.” However, as with Flags, when the Pennant completes you will often observe a sharp spike in volume. Duration of the Pattern
Trading Considerations
Possibility of Price Reversal
In some rare cases, the amount will bust against the earliest amount activity, and generate a reversal trend. The pattern reversal may be signaled during the Pennant enhancement by an enhance in quantity, as compared to the additional typical decrease. Duration of the Pattern
Target Price
It is generally held that the duration of the mast suggests the potential amount enhance. Like the Flag, the Pennant is regarded to be a pause in an uptrend. Following the Pennant, the amount commonly advances to reproduce the elevation of the mast, while continuing in the movement of the incoming tendency.
Criteria that Supports
Volume
Volume should decrease visibly as the structure forms.
A powerful quantity spike on the day of the construction affirmation is a effective indication in assistance of the potential for this structure. The amount spike should be significantly above the average of the amount for the length of the structure.
Criteria that Refutes
Duration of the Pattern
According to Martin Pring, a pattern that exceeds “4 weeks to develop should … be treated with caution”. After 4 weeks, interest in the stock is likely to decrease to point that it is unlikely to continue in a strong uptrend. No Volume Spike on Breakout
Underlying Behavior
This pattern is effectively a pause in an uptrend. The cost has moved ahead of itself with a sharp rise; therefore market training requires a break before proceeding the uptrend. This pause is reflected in the reducing trading quantity.
Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.
Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?
I am a actual competitive investor by nature, I desire to take enormous opportunities when I recognize it is a ideal entry point. Like Livermore, I was also a boy speculator and had no issues taking to induce on the big trades and profited develop many of them. However, as I full-blown as a trader I learned this way of trading leads to much increased draw downs of financing and enormous quantities of stress holding such large placements and can lead to making bad decisions due to emotions. Also timing has to be almost perfect to be able to hold the position. I have manage this behavior by following the 1% AUM risk principle for position sizing, using OTM options to explicit big trades, and pyramiding inside indexes for big placements sizing for decreased risk of unpredictability. The key to achievements for ideal and most solid long phase finances employers is appropriate situation dimension, not big investments.
Yes, We had taken long position on NF 5774 as per our long term analysis:
This is the 48th Day course in a series of 60-Days called “Technical Analysis Training”
You will get daily one series of this Training after 8 o’clock night (Dinner Finished)
Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)
Megaphone Bottom Chart Pattern
Implication
A Megaphone Bottom also referred as a Broadening Bottom is regarded a bullish signal, showing that the existing downtrend may reverse to form a new uptrend.
Description
This rare enhancement can be distinguished by the successively higher highs and lower lows, which form after a downward move. Generally, two higher highs between three lower lows form the pattern, which is accomplished when price split above the second higher high and do not fall below it.
The structure is completed when, commonly on the 3rd upswing including the structure, cost split above the earlier high but fail to fall below this stage once
Message for you(Trader/Investor): Google has the answers to most all of your questions, after exploring Google if you still have thoughts or questions my Email is open 24/7. Each week you will receive your Course Materials. You can print it and highlight for your Technical Analysis Training.
Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.
Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?
This is the 47th Day course in a series of 60-Days called “Technical Analysis Training”
You will get daily one series of this Training after 8 o’clock night (Dinner Finished)
Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)
Head and Shoulders Bottom Chart Pattern
Implication
A Head and Shoulders Bottom is regarded as a bullish indication. It suggests a potential reversal of the existing downtrend into a new uptrend.
Description
The Head and Shoulders bottom is a famous pattern with traders. This pattern marks a reversal of a downward trend in a economic instrument’s cost.
Amount is completely important to a Head and Shoulders Bottom. An trader will be searching for improving amounts at the point of breakout. This enhanced amount definitively marks the end of the pattern and the reversal of a downward event in the amount of a inventory.
The neckline is a crucial factor of this pattern. The neckline is developed by attracting a line attaching the 2 large amount tips of the enhancement. The 1st high point happens at the end of the left shoulder and starting of the downtrend to the head. The second marks the end of the head and the starting of the downturn to the right shoulder. The neckline generally points down in a Head and Shoulders Bottom, but on unusual events can mountain up.
The pattern is accomplish when the opposition marked by the neckline is “broken”. This happens when the amount of the inventory, increasing from the low point of the right shoulder moves up through the neckline. Multiple specialized experts only consider the neckline “broken” if the stock closes above the neckline.
It is most important to observe amount at the detail where the neckline is broken. For a true reversal, specialists consent that significant amount is important.
Variations of the Head and Shoulders Bottom
There are a few notable variations for this pattern.
Multiple Head and Shoulders Patterns
Many valid Head and Shoulders patterns are not as well identified as the classical head with a shoulder on either side. It is not unusual to see more than two shoulders and more than one head. A popular variation of a multiple Head and Shoulders pattern contains two left shoulders of more or less equal size, one head, and then two right shoulders that imitate the range and structure of the left shoulders.
Important Characteristics
Following are important characteristics for this pattern.
In a classic Head and Shoulders Bottom, the left and right shoulders hit their relative low points at approximately the same price and level. In addition, the shoulders are usually about the same distance from the head. Experts like to see symmetry but variations are not lethal to the validity of the pattern.
Volume
In a well-formed pattern, the slope will not be too steep, but don’t certainly promotion a improvement with a steep neckline. Many experts think an upward sloping neckline is additional bullish than a downward sloping one. Others say slope has little to do with the stock’s degree of bullishness.
Duration of Pattern
Consider the length of the pattern and its relationship to your investing time horizons. The duration of the pattern is regarded to be an signal of the period of the impact of this pattern. The longer the pattern the longer it will take for the amount to achieve the desired amount. The shorter the pattern the sooner the price move. If you are considering a short-term trading possibility, look for a structure with a short length. If you are considering a longer-term trading possibility, look for a pattern with a longer length. The length of the pattern is sometimes called the “width” or “length” of the pattern.
Need for a Downtrend
This is a reversal pattern which marks the transition from a downtrend to an uptrend.
Slope of the Neckline
In a well-formed pattern, the slope will not be too steep, but don’t automatically discount a formation with a steep neckline. Some experts believe an upward sloping neckline is more bullish than a downward sloping one. Others say slope has little to do with the stock’s degree of bullishness.
Trading Considerations
Duration of the Pattern
Consider the duration of the pattern and its relationship to your trading time horizons. The duration of the pattern is considered to be an indicator of the duration of the influence of this pattern. The longer the pattern the longer it will take for the price to reach the Target Price. The shorter the pattern the sooner the price move. If you are considering a short-term trading opportunity, look for a pattern with a short duration. If you are considering a longer-term trading opportunity, look for a pattern with a longer duration. The duration of the pattern is sometimes called the “width” or “length” of the pattern.
Target Price
The target price provides an significant indicator about the possible cost move that this pattern indicates. Consider whether the desired price for this pattern is sufficient to provide adequate returns after your costs (such as commissions) have been taken into account. A good rule of thumb is that the target price must indicate a potential return of greater than 5% before a pattern should be considered useful. However you must consider the current price and the volume of shares you intend to trade. Also, check that the target price has not currently been obtained.
Inbound Trend
The inbound trend is an significant attribute of the pattern. A shallow inbound trend may suggest a period of combination before the cost move recommended by the pattern begins. Look for an inbound trend that is extended than the length of the pattern. A good rule of thumb is that the inbound trend should be at least two times the length of the pattern.
Criteria that Supports
Support and Resistance
Look for a location of support or opposition around the target cost. A region of cost combination or a powerful Support and Resistance Line at or around the desired price is a strong signal that the price will move to that point.
Location of Moving Average
The Head and Shoulders Bottom should be be below the Moving Average. Analyse the place of the pattern to a Moving Average of recommended duration. For short duration patterns use a 50 day Moving Average, for longer patterns use a 200 day Moving Average.
Moving Average Trend
The Moving Average should change direction within the duration of the pattern and should head in the direction indicated by the pattern. For short duration patterns use a 50 day Moving Average, for longer patterns use a 200 day Moving Average.
Volume
Volume will usually be highest on the left shoulder and lowest on the right.
A strong quantity spike on the day of the pattern verification is a intense indication in support of the possible for this pattern. The amount spike should be substantially above the typical of the volume for the period of the pattern.
Other Patterns
Other reversal patterns (such as Bullish and Bearish Engulfing Lines and Islands) that occur at the peaks and valleys indicate strong resistance at those points. The presence of these patterns inside a Head and Shoulders is a strong indication in support of this pattern.
No Volume Spike on Confirmation
The lack of a volume spike on the day of the pattern confirmation is an indication that this pattern may not be reliable. In addition, if the volume has remained constant, or was increasing, over the duration of the pattern, then this pattern should be considered less reliable.
Location of Moving Average
If the Head and Shoulders Bottom is above the Moving Average then this pattern should be considered less reliable. Compare the location of the pattern to a Moving Average of appropriate length. For short duration patterns use a 50 day Moving Average, for longer patterns use a 200 day Moving Average.
Moving Average Trend
Look at the direction of the Moving Average Trend. For short duration patterns use a 50 day Moving Average, for longer patterns use a 200 day Moving Average. A Moving Average that is trending in the opposite direction to that indicated by the pattern is an indication that this pattern is less reliable.
Short Inbound Trend
An inbound trend that is significantly shorter than the pattern duration is an indication that this pattern should be considered less reliable.
Message for you(Trader/Investor): Google has the answers to most all of your questions, after exploring Google if you still have thoughts or questions my Email is open 24/7. Each week you will receive your Course Materials. You can print it and highlight for your Technical Analysis Training.
Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.
Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?
Following is an overview of “The Financial Waves Monthly Update” which is a 18-page report and has 12 different charts giving not only Indian but Global outlook using techniques like Elliott wave, Time Cycles, Fibonacci Projections, Channels, Sensex in Gold (real money), PE ratio, PB ratio, etc.
In September we saw strong pullback in Indian markets from lower levels and prices rallied by almost 3000 points on Sensex and 1000 points on Nifty. However, after approaching the multi-year resistance line which has been ending the up move since more than 5 years worked this time as well and prices finally closed the month within the body of the previous month. If we ignore the closing and consider only highs and lows, we can see a higher high and higher low formation. A move above … will be a strong positive sign. Sensex in Gold – real money gives correct picture of why the majority of stocks are at new lows!
In current research we have showed Bank Nifty relative chart along with Nifty which shows that why Banking sector as a whole should ……… for months to come. …….that will be starting probably post mid 2014 …
Sensex PE ratio / PB ratioa tool many believe to be a fundamental measure but for us it provides more of technical perspective and helps to understand how markets have been trending along with it.
On currency front, when everyone was panicking we have mentioned 70 levels as very important as it is 1.618 * wave i and we can clearly see prices stopped its uptrend near this level and formed an inside monthly bar. This indicates there is halt in the …..
International precious metals, both Gold and Silver has formed a monthly inside bar and should also continue to move sideways for digesting the multi-month down move. This time we are showing Silver long term chart and why this metal should also underperform along with Gold. The euphoria has slowly subsided in previous metals along with Indian currency as well.
US markets have not been doing much and all the negative news about US Government shutdown has not impacted their markets at all. In fact S&P500 closed positive by more than half a percent when the concerns were looming about US default a probability if they fail to raise the debt ceiling. It seems US stock market is not too concerned about what economists believe about Government shutdown and debt, after all for us markets are supreme and news is just a technical indicator.
This time our stock pick from Indian markets is Capital Goods heavy weight L&T and we should have ….. value of this stock in future. Overall, September had lot of emotional flux for both bulls and bears trading Indian markets and was relatively muted for other assets most of which formed an inside bar – DJIA, Gold, Silver!
To become a subscriber, subscribe to our free newsletter services. Our service is free for all.
This is the 46th Day course in a series of 60-Days called “Technical Analysis Training“
You will get daily one series of this Training after 8 o’clock night (Dinner Finished)
Follow MoneyMunch.com Technical Analysis Directory and Learn Basic Education of Technical Analysis on the Indian Stock Market (NSE/BSE)
Flag Bearish Chart Pattern
Implication
A Flag (Bearish) is considered a bearish signal, indicating that the current downtrend may continue.
Description
A Flag (Bearish) follows a steep, or nearly vertical decline in price, and consists of two parallel trendlines that form a rectangular flag shape. The Flag can be horizontal (as though the wind is blowing it), however it often has a slight upward trend.
The vertical downtrend, that precedes a Flag, may occur because of buyers’ reactions to an unfavorable company announcement, such as a court case, or a sudden and unexpected departure of a CEO. The sharp price decrease is sometimes referred to as the “flagpole” or “mast”.
The rectangular flag shape is the product of what technical analysts refer to as consolidation. Consolidation occurs when the price seems to bounce between an upper and lower price limit. The Flag (Bearish) pattern formation reflects the reaction of sellers who are willing to sell at a lower cost, and the influx of buyers who inadvertently drive up the price as they compete to buy at the best possible price.
A bearish signal occurs when the price rebounds beyond the lower trendline of the Flag formation, and continues the original downward price movement. This is considered a pattern confirmation.
When speaking about Flags, technical analysts may use jargon and refer to the flag as “flying at half-mast”. Visually, this reference is nothing like a flag at half-mast, such as on a day of national mourning. Instead, this term refers to the location of the flag – at the mid-point of what would otherwise be a continuous downtrend.
Important Characteristics
Following are important characteristics for this pattern.
Trendlines
Flags are very similar to Pennants. However, with a Flag, the price trendlines tend to run parallel, whereas with a Pennant, the price trendlines tend to converge. John J. Murphy notes that a price drop below the lower trendline may indicate the resumption of the downtrend.
Volume
As the Flag develops, the volume tends to decrease. However, you will often notice a sharp spike in volume at the end of a Flag, whether it is bearish or bullish.
Duration of the Pattern
Martin Pring notes in his book, Technical Analysis Explained that “Flags can form in a period as short as 5 days or as longs as 3 to 5 weeks.” John J. Murphy identifies that Flags “often last no longer than one or two weeks.”
Trading Considerations
Possibility of Price Reversal
In some rare cases, the price will break against the original price movement, and create a reversal trend. The pattern reversal may be signaled during the Flag formation by a pattern of increasing volume, as opposed to the more typical decrease.
Duration of the Pattern
The duration of the pattern depends on the extent of the price fluctuations (consolidation). The greater the fluctuations, the longer a pattern will take to develop.
Target Price
It is commonly held that the length of the flagpole indicates the potential price decrease. When the Flag completes, the price typically jumps to replicate the height of the original flagpole, while continuing in the direction of the inbound trend.
Criteria that Supports
Volume
Volume should diminish noticeably as the pattern forms.
A strong volume spike on the day of the pattern confirmation is a strong indicator in support of the potential for this pattern. The volume spike should be significantly above the average of the volume for the duration of the pattern. In addition, the volume over the course of the pattern should be declining on average.
Criteria that Refutes
Duration of the Pattern
According to Martin Pring, a pattern that exceeds “4 weeks to develop should … be treated with caution”. After 4 weeks, interest in the stock is likely to decrease to point that it is unlikely to continue in a strong downtrend.
No Volume Spike on Breakout
The lack of a volume spike on the day of the pattern confirmation is an indication that this pattern may not be reliable. In addition, if the volume has remained constant, or was increasing, over the duration of the pattern, then this pattern should be considered less reliable and may actually reverse.
Long Inbound Trend
Shabacker writes that, “When a mast is long … and it’s Flag relatively small, we should naturally expect the movement to be pretty well exhausted when its indicated objective is reached.” He suggests that when you observe this formation, and a price continuation occurs, it is best to use the flagpole as a “yard-stick” to indicate the level at which to “take profits, step aside, and watch for further chart developments.”
Underlying Behavior
This pattern is effectively a pause in a downtrend. The price has gotten ahead of itself with a steep rise; therefore market activity takes a break before continuing the downtrend. This pause is reflected in the decreasing trading volume. Similarly, a spike in volume marks the resumption of the downtrend.
Message for you(Trader/Investor): Google has the answers to most all of your questions, after exploring Google if you still have thoughts or questions my Email is open 24/7. Each week you will receive your Course Materials. You can print it and highlight for your Technical Analysis Training.
Wishing you a wonderful learning experience and the continued desire to grow your knowledge. Education is an essential part of living wisely and the Experiences of life, I hope you make it fun.
Learning how to profit in the Stock Market requires time and unfortunately mistakes which are called losses. Why not be profitable while you are learning?
Unlock This Article
