Charts for Beginners- Head and Shoulders
Updated
Captain here. I've seen more fucked up head and shoulders charts than you could imagine. Many simply do not understand the rules. The above chart shows an "inverse" head and shoulders, but many times there are regular head and shoulders patterns that stand up right. There are two shoulders who peak roughly near the same price point, and a head that extends past both shoulders. And there is a neckline that is tagged on the chart. The price target on an inverse head and shoulders is calculated as follows:
a = head value
b = neckline value
c = remainder of head value and neck value
d = target
b - a = c
c + b = d
In this case,
4470 - 3200 = 1270
1270 + 4470 = 5740
So 5740 *according to the rules* is where we could go in the short term. If you are long from here, please do not try to take profits at 5740. This is why I've shown a target range on the chart. Notice that 5740 was the same resistance level on Nov 19. Funny how math works.
If this was helpful to you, give me a follow or leave a comment!
Captain out.
Educational purposes only. Do not make real financial decisions based on my charts.
a = head value
b = neckline value
c = remainder of head value and neck value
d = target
b - a = c
c + b = d
In this case,
4470 - 3200 = 1270
1270 + 4470 = 5740
So 5740 *according to the rules* is where we could go in the short term. If you are long from here, please do not try to take profits at 5740. This is why I've shown a target range on the chart. Notice that 5740 was the same resistance level on Nov 19. Funny how math works.
If this was helpful to you, give me a follow or leave a comment!
Captain out.
Educational purposes only. Do not make real financial decisions based on my charts.
Note
Note- don't confuse this chart with a prediction. ***IF*** this is a H&S pattern at play, it will follow these rules.Note
Sitting at 3700 again, we'll see if it breaks. Not worth longing from here unless it breaks past 4400.
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