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Harmonic Patterns

Commodities Needs a Healthy CorrectionNSE:CNXCOMMODITIES Bullish divergence with macd will power up the price, but before that the harmonic impulse play will cause a correction as being expected, 3 levels of bounce based on the fibonacci supports have been selected... the target for all is initially the outer line of the pitchfork And if beyond that then the resistance level In between there is the pivot, i expect some volatility in the pivot region Disclaimer..Not an investment/trading recommendation
NSE:CNXCOMMODITIESEducation
by capsule91
Nifty: FIb Analysis -- Play with numbersI am not a bear..I don't want market to go down BUT it is what it is and we have to follow the trend AND the current trend is down..right? So whatever targets we project will be on the downside. The 50% retracement has been an important reversal area in the past corrections.. see my older posts, so we can assume that it can act as a solid support in this downfall too. Not only that we have a number of other fib confluences near that level (see chart) so that could add some extra cushions to support the markets. For investors and traders the value zone represented in the chart may be an important belt to pump money into the markets. Hope this analysis would help investors and traders in prudent decision making. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
5
Market cycle? Has the major correction started?!Details on the chart, it's very interesting. Draw a triangle for the previous bull rally, copy & paste it on the current bull rally. It fits perfectly. The previous bull rally from Feb 2014 to March 2015 took 393 days and NIFTY went up by 3185 points. The recent bull rally from Dec 2016 to Jan 2018 took 399 days and NIFTY went up by 3277 points. The correction after the previous bull rally took 362 days and NIFTY went down by 2293 points. So based on the same logic, if the major correction has started, we should see NIFTY tat 9000 levels by Dec 2018?! Just for study purpose!
NSE:NIFTYEducation
by nileshgr
Nifty: The Bat PatternHi All, Let's quickly get to the charts. I can observe a Bat pattern completed at 10180. This could be taken as a reversal trade setup with traditional targets at 10295, 10330 and 10365. So If this setup works I would be passively bullish for the above conservative targets. Only on break and close above 10420 (on this chart), I may again play for 10600. Further targets can only be derived after looking at the price action above 10650 level. What if 10140 is breached ( either after hitting above targets or otherwise). In that scenario, I will be bearish for 10000 psychological level target and the extended 9700-9750 target zone. Hope this brief analysis will help some traders to plan their trades well. Happy weekend and wish u all a more profitable week ahead. Regards
NSE:NIFTYEducation
by Bravetotrade
THE HARMONIC PATTERNS SERIES I: THE BAT PATTERNThree things are very popular in TA: W and M shapes; Fibonacci levels; and Elliot Wave. And these three are the building blocks of Harmonic patterns. It has been observed that the frequently occuring W and M patterns have fixed levels of retracements and projections for each leg. And it is those fixed levels which differentiate one pattern from the other. So the inventors have given different names to these patterns on the basis of the fib. levels and Elliot projections working inside a pattern. I am starting this series from the BAT pattern and I 'll try to cover one pattern at the weekends. BAT PATTERN THE X-A LEG Strong rejection from a support/resistance level (X) which takes the price to another important level of S/R level (A) A-B LEG Retracement of XA leg. Point B should retrace between 38.2% to 50 % of X-A B-C LEG Retracement of AB leg. Point C should retrace between 38.2% to 88.6% of A-B C-D LEG 1) Retracement of XA leg. Point D should retrace 88.6% of X-A; and 2) Another condition is that point D should be between 1.618%-2.618% of B-C projection. Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point. # Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X. # A complete reversal should not be expected at point D in any harmonic pattern. Only the price action and other confirmations can tell us if the overall trend has reversed of not. TRADINGVIEW TOOL: Luckily we dun have to draw each and every leg of the pattern by pulling our fib. tool each time. TV has a great tool which can be used to draw these patterns easily. Hit Like/comment if this information is useful. Trade safe, be healthy. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
3
The Perfect Bullish Bat Below 10094Hi fellows, hope you are doing great with your trading. I wish you all the best for the coming week. In my previous post I shared my observations with the expectations that the index will achieve higher levels in the coming days. Unfortunately, I had to take trades in the reverse direction, later in the week, in order to mitigate my losses. It is all part of trading and I need to be flexible in this profession. The stubborn will be blown away by the winds, but only the flexible will survive the storms. Current observations: Below the level 10094, I would assume that it is a bullish BAT pattern which is under formation. I called it a PERFECT BAT because the B leg retraced exactly 0.5 of A leg; also the B-C projection at D comes out to be exactly 2 times; and the A-B-C extension at D is exactly 1.618 as a complemetary confluence. These are all traits of a perfect BATpattern. For me the BAT would be in action below 10094. A conservative approach would be to wait till 10013 where AB=CD completes and also 10000 could also act as a psychological support. But break of 10K would trigger stops for long traders and may attract new shorts. So I would call 10000-10094 as the key level to watch out for the next week. The PRZ for the BAT falls at 9780, I would call 9780-9687 as a strong support zone below the 10K mark. If this support zone holds, a bounce of the order of 38.2% to 61.8% can be seen ( which would be 10020 to 100169 resp.) The question of complete reversal from this zone should be left unanswered as of now. Other Possibilities: It is possible that the 10094 holds and market rebounds from there. In that case, I would like to see the index above the red downtrend line in order to be bullish. It is also possible that the market consolidated between the red trendline and 10094 before giving any decisive move. Cycle study: Market reacted before its 25 day uptrend cycle, so I expect some sort of reversal at the end of this cycle. But this time it could be an upward reversal. I ll have reassess the situation at the cycle completion. So, my post has short term bearish undertones, with the expectations of intermittent bounces in the market. For long term I am still bullish but I need specific levels for that. With a regret that I am not able to update during the week, I hope you guys will find this post useful and take your trading decisions with care. Do hit the like button for better posts ahead. Trade safe, stay healthy. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
5
THE CYPHER PATTERNThis pattern is different. As we observed in the previously discussed patterns, the C point never extended beyond point A. But this pattern is formed when C point extends beyond A. Rules: 1. X-A: A strong leg which ends at an important Support/Resistance level. 2. A-B: Point B should be between 38.2 to 61.8% of X-A leg 3. B-C: The leg which makes this pattern unique. Point C should be between 1.272 to 1.414 of A-X projection. Some authors also take 1.13 to 1.414 as reference points here. I personally favor the latter but the former is the most agreed levels of projection. 4. C-D: Point D should be 78.6% of ' X-C' leg. Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point. # In Bullish harmonic patterns an upward reversal is expected at point D, whereas in Bearish patterns a downward reversal is expected at point D. # Normally a buy/sell order is placed at point D, expecting some sort of reversal; and targets are placed at 38.2% and 61.8% of C-D retracement. # A complete reversal should not be expected at point D in any harmonic pattern . Only the further price can provide confirmations about trend reversal. Refer the following post for learning how to trade harmonic patterns. All the other published patterns are also linked to this post. Trade safe, be healthy Hit like/comment and follow if this information is useful. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
8
THE BUTTERFLY PATTERNFor a brief overview about harmonic pattern fundamentals, first go to the Post 1 of this series (link will be soon in the update section). THE BUTTERFLY PATTERN The pattern is recognized by the exclusive 78.6% of XA retracement at point B; and the 1.27 XA projection at point D. X-A: A strong leg which ends at an important Support/Resistance level. A-B: Should retrace precisely 78.6% of X-A. B-C: Should retrace between 38.2 to 88.6 % of A-B. This leg should not extend beyond point A. C-D: The most important leg to confirm the butterfly pattern . C-D should extend 127% of X-A and not more than that. C-D=A-B or C-D=1.27 A-B : Another important confirmation, C-D leg should complete between 1 to 1.27 times A-B B-C Projection: Point D should be at 1.618 to 2.24 B-C projection. Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point. # In Bullish harmonic patterns an upward reversal is expected at point D, whereas in Bearish patterns a downward reversal is expected at point D. # Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X. # A complete reversal should not be expected at point D in any harmonic pattern . Only the further price can provide confirmations about trend reversal. Trade safe, be healthy Hit like/comment if this information is useful. May all of us be victorious over the evil inside us -- Enjoy Dasehra Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
2
Pattern Series 6 - Bearish Gartley Pattern!I thought these cypher, Gartley patterns are tough until I learnt it is based on fibonacci ratios. Draw fibonacci levels from X to A. Point B should not close above 0.618 fib level. The point C should form between A and B. Point D should not close above 0.786. Now lets see how to trade this Gartley pattern. Sell at 0.786 with the stoploss of few points above it. Your risk should be minimum and it should not exceed risk : reward ratio of 1 : 1. Targets are 0.5, 0.38 and 0.236 fib levels. People who love fibonacci ratios, dont miss Gartley pattern trades!
NSE:TATACOMMEducation
by vanathi
12
THE HARMONIC PATTERNS SERIES: III THE CRAB PATTERNHi, I am back with one more harmonic Pattern -- The CRAB For a brief overview about harmonic pattern fundamentals, first go to the Post One of this series (link will be soon in the update section). CRAB PATTERN In the BAT and the Gartley the price action in the last leg did not stretch beyond the Point X but In this pattern last leg stretches beyond X. In this case it is the B-C projection which may sometimes (when D extends beyond 2.618 B-C) help in identifying the Pattern in advance. X-A: A strong leg which ends at an important Support/Resistance level. A-B: Should retrace between 38.2 to 61.8% of X-A. B-C: Should retrace between 38.2 to 88.6 % of A-B. This leg should not extend beyond point A. C-D: The most important leg to confirm the Crab pattern . C-D should retrace 161.8% of X-A and not more than that. C-D=1.27 to 1.618 AB: Second important confirmation, C-D leg should complete between 1.27 to 1.618 times A-B B-C Projection: Point D should be between 2.618 to 3.618 B-C projection. You can notice the difference between Bat, Gartley and Crab B-C projections. Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point. # In Bullish harmonic patterns an upward reversal is expected at point D, whereas in Bearish patterns a downward reversal is expected at point D. # Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X. # A complete reversal should not be expected at point D in any harmonic pattern . Only the further price can provide confirmations about trend reversal. Trade safe, be healthy Hit like/comment if this information is useful. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
11
The Harmonic Pattern Series: II The Gartley PatternHi, I am back with one more harmonic Pattern -- The Gartley For a brief overview about harmonic pattern fundamentals, first go to the link in the update section. GARTLEY PATTERN X-A: A strong leg which ends at an important Support/Resistance level. A-B: The most important leg to recognize this pattern. Should retrace exactly 61.8% of X-A. B-C: Should retrace between 38.2 to 88.6 % of A-B. This leg should not extend beyond point A. C-D: Second most important leg to confirm the Gartley pattern. C-D should not retrace more than 78.6 % of X-A. A-B=C-D: Another important pattern inside the Gartley is that A-B leg should be equal to C-D. The presence of this pattern provide complementary confirmation for potential reversal at point D. B-C Projection: Point D should be between 1.13 to 1.618 B-C projection. Pattern completes at point D so it is the most important point in the pattern. If all the above conditions are valid, a reversal is expected from this point. # In Bullish harmonic patterns an upward reversal is expected at point D, whereas in Bearish patterns a downward reversal is expected at point D. # Normally a buy/sell order is placed at point D, expecting some sort of reversal, and targets are placed at 38.2% and 61.8% of A-X. # A complete reversal should not be expected at point D in any harmonic pattern . Only the future price action can provide confirmations about trend reversal. For those who do not about the harmonic pattern tool, It is the XABCD tool (just below the text tool) provided in the side tool bar on the chart page. Trade safe, be healthy Hit like/comment if this information is useful. Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
6
Nifty Analysis II : Harmonic Ratios and The Price ActionWhenever Raman, one of my best friend, sits in front of Television and hears a Technical analyst he could not stop himself saying," ho sakta hai wahan tak chala jaye..neeche bhee aa sakta hai..oopar bhee ja sakta hai..bc..inko kush bhee pata nahi aur hame bevakoof bana rahe hain". The psychological setup of people like him is so rigid that we can never convince them that TA is all about probabilities. At present we are in a similar situation, where index is approaching 10036 and many traders are waiting for the index to touch 10000 mark for either banking their profit or sell short. But why 10036 is so important? yes, it is 1:1 price extension taken from Feb.2016 lows. In Harmonic patterns, 100% extension (AB=CD) is said to be of great importance. There are full fledged chapters on AB=CD. The basic structure of the pattern is that AB and CD legs should be similar in price as well as time..well !! you can say approximately if not precisely. So that's it? No. The twist is that this pattern acts as a basic building block of many other harmonic patterns and there are many variation to it. Depending on several factors (can't discuss in this post), CD leg can extend much greater than AB -- 1.272, 1.618 or higher (read Larry Pesavento). We will try to discuss some parameters here while applying them on NiftyWeekly chart. Parameter 1: No. of bars Ideally AB=CD has same no. of bars in both the legs. But if CD has more no. of bars, call it a weaker leg and has greater chances of ending up as 1:1 Parameter 2 :Range of Bars The beginning of CD is the most important event. If it begins with a wide range bar or a gap, consider it at least 1:1 and chances of extending further are great. The more number of wide range bars in this leg, the better. Parameter 3: Slope of the Legs The higher the better. If CD leg is steeper than AB, there are better chances of extension rather than 1:1 Taking these parameters into consideration we can see that in NiftyIndex the CD leg has not been as enthusiastic as AB (See notes on chart). 1) No. of bars in CD are more than AB. 2) None of the bar ranges 4% (except one). The Average Range of wide range bars in CD is approx. 2.5%, whereas it is 4% or higher in AB. Notice that the range declined after 9000 mark, whereas it should have increased at break above this level. 3) Yes, slope is one parameter where CD can compete with AB. But CD does not have better slope than AB. On the basis of above discussion, we can say that there are greater chances of CD = AB. Remember that there are no better indicators than time and price action. So better follow them rather than any pattern. Dun be as rigid as Raman. Hit like / comment if you think these observation can be useful. Trade safe, stay healthy. Best Regards Bravetotrade
NSE:NIFTYEducation
by Bravetotrade
2