Ng flag pattern on daily chart, tgt Rs 240 mcx
In attached daily NG chart we can see flag pattern is just ended. The flag pattern is continuation pattern. This flag pattern has a rectangular shape, while the pennant looks more like a triangle. These two patterns are formed when there is a sharp price movement followed by generally sideways price movement, which is the flag or pennant. The pattern is complete when there is a price breakout in the same direction of the initial sharp price movement. The following move will see a similarly sharp move in the same direction as the prior sharp move. The complete move of the chart pattern - from the first sharp move to the last sharp move - is referred to as the flag pole.
The volume, as with most breakout signals, should be seen as strong during the breakout to confirm the signal. Upon breakout, the initial price objective is equal to the distance of the prior move added to the breakout point. Here, prior sharp up movement was from 2.1000 to 2.9800, then the resulting price objective from a price breakout of 2.7000 would be 3.62 ( 2.7000 + 0.9280 ).
It looks very greedy but this chart pattern rule tell us the same targete price.
On moving average front, 10 dma is about to cross 20 dma upwards. %0 dma is also moving in upward direction.
For mcx NG Rs 180 ( breakout point ) + 60 ( fagpole ) = Rs 240.
One more requirement to be fulfilled for this chart pattern is It is that ,the price movement prior to the flag or pennant be a strong, sharp move. Looking at the attached chart we can easily see that the prior to flag move was sharp one.
Conclusion is that , NG is in a breakout condition of flag chart pattern on daily charts. Price can go upward to Rs 340 mcx. This is pure technical analysis but we should keep in mind that heat wave is cutting Natural Gas storage glut since last 2 weeks.
You can read this post as a article on investing.com, comment - analysis section also. link -------
http://in.investing.com/analysis/ng-daily-chart-flag-pattern-200145154
The volume, as with most breakout signals, should be seen as strong during the breakout to confirm the signal. Upon breakout, the initial price objective is equal to the distance of the prior move added to the breakout point. Here, prior sharp up movement was from 2.1000 to 2.9800, then the resulting price objective from a price breakout of 2.7000 would be 3.62 ( 2.7000 + 0.9280 ).
It looks very greedy but this chart pattern rule tell us the same targete price.
On moving average front, 10 dma is about to cross 20 dma upwards. %0 dma is also moving in upward direction.
For mcx NG Rs 180 ( breakout point ) + 60 ( fagpole ) = Rs 240.
One more requirement to be fulfilled for this chart pattern is It is that ,the price movement prior to the flag or pennant be a strong, sharp move. Looking at the attached chart we can easily see that the prior to flag move was sharp one.
Conclusion is that , NG is in a breakout condition of flag chart pattern on daily charts. Price can go upward to Rs 340 mcx. This is pure technical analysis but we should keep in mind that heat wave is cutting Natural Gas storage glut since last 2 weeks.
You can read this post as a article on investing.com, comment - analysis section also. link -------
http://in.investing.com/analysis/ng-daily-chart-flag-pattern-200145154
