Inverse Head and Shoulders in Stocks??
Stocks have dipped, testing lower levels in the 4600 handle. We found good support at 4632, but are witnessing some volatility here. We may be seeing the formation of an inverse head and shoulders with a neckline at 4668, one of our technical levels which appears to be providing resistance. Several red triangles on the KRI have confirmed resistance as we have tested this level three times. The Kovach OBV is still very bearish, but if momentum comes through and we are able to break out, then 4693 and 4729 are the next targets. The latter level has provided prohibitive resistance the last time stocks attempted higher levels last week. We still have several factors weighing on the market including Covid recovery worries, staffing shortages, inflation and interest rates. If our inverse H&S breaks down, its a bearish sign indeed, but watch for support at 4580.
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