NG, developing H & S pattern on weekly chart

nymex weekly ng chart

mcx weekly ng chart 

     Read this post very carefully, if you are NG trader. NG price is around very crucial point. You can see it on both weekly charts that, price is about to make Head & Shoulder pattern. First left shoulder, Head is already there. Last shoulder is in making. Yes I admit the fact that,'' there can be failure of the chart pattern." Price can go upward from Friday closing price as shown with upward red arrow. But in that situation there can be still chance of making last shoulder because there is no certain rule about height of shoulders. It may not be same in respect of height. One shoulder can more high or low than other. It should be lower than Head, that's all about this pattern in respect of height of shoulders. Neckline should be on same price mark is most important rule. Here in both charts we can see that," neckline is placed at 2.527 and 169 rupees. All 3 points of first shoulder and head is placed at mentioned price marks.

     Now we should look at the second head in making. If we look at first shoulder & Head's top and bottom, reversal of price is in 'V' shape recovery. While moving up & down price moved in vertical form. But look at the last shoulder's last 4 candles. These candles are bending down or consolidating. This action made me suspicious about possibility of Head & Shoulder is in making. 

     Now most important question is that," how can we earn profits from this chart reading ? how to use this info ?" Answer is simple, I wrote 2 arrows ( red ) in chart. If price will go in direction of southward moving arrow, it will go towards neckline. In that case, support will be low point of last 2 candles. 3.156 or Rs 203 & 3.010 or Rs 195. Breaking these 2 points will push the price directly toward 2.502 or  Rs 169 mark. If it will break this price mark downward then next target will be 1.593 or Rs 110.  Neckline of HS pattern is placed there. As it is weekly chart, it will take its time in weeks. and second point is that," after breaking neckline, price can return above neckline again. Showing falls failure of HS pattern. This is habit of this chart pattern. But don't be afraid, keep patience in that situation.  

     Another situation is exact opposite of this downward theory. Price can go upward as shown with the red arrow ( upward moving ). If this happens, next resistance will be 3.30, 3.34 or Rs 214, Rs 218. After crossing these 2 hurdles price can go directly towards 4.002 or Rs 265. If any how price break this mark upward then only sky is the limit for NG price.

     Dear Friends, read it very carefully, try to understand the situation of NG price movement, keep it mind that,'' it is weekly chart and not for short term use." Many little up and downs can be there. 

     Hope you find this article useful in taking your decisions. Thanking you, Jay Shriram.