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Showing posts from January, 2014

MCX Copper in Double Correction

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 MCX Copper continuous hourly chart From the above chart, the red metal is moving in a lower high and lower low formation and it is precisely moving in a falling channel Recently the metal faced the resistance of the channel and has broken the support today which opens further negative possibilities. As per wave theory, prices are moving in double correction pattern as per the chart (a-b-c-x-a-b-c) After completing first correction, prices formed wave x close to 740 levels and now since all the important supports are broken it is very much evident that prices are poised to falter and can move below its previous low in form of wave a of second correction. The summation is prices are poised to plunge near till 680-670 levels as far as 733 is intact on the upside.

Nifty: Ending Diagonal Pattern

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Ending Diagonal pattern popularly known as Wedge is always difficult to identify especially in making. Normally in wedge pattern we can see that prices are making higher highs and higher lows but the momentum on the upside slows down. In relation to this we can also compare it with Relative Strength Index (RSI) where it will form lower highs and lower lows which will give a negative divergence. Such divergence will give an indication that upside is capped and there are high chances for market to reverse. We will explain further on ending diagonal pattern but before that we will show where ending diagonal has occurred and how it has impacted the markets. The wedge pattern has occurred before the fall of 2008, before the fall of 2013 and the recent fall of 2014 where it eradicated more than 300 points. This wedge pattern has occurred on smaller time frame. Ending Diagonal Pattern is one of the pattern which occurs in wave 5 or in wave C. It is drawn with the help of two trend