Cancellation of “Head-and-Shoulders” Pattern. Bears trapThe "Head-and-Shoulders" (H&S) pattern is considered a powerful trend reversal indicator. However, it can also become very costly for new traders. Yesterday, the S&P provided a great example of H&S cancellation. Traders who entered short on the break-out of the shoulders line (and Monday's low) incurred losses after the price returned to the previous day's range and rallied all the way up. Such scenarios happen more often than you might think.
To avoid being caught in such traps, it is important to consider two things:
1. Higher Level Context : In this example, the H&S pattern formed on the hourly time frame. But if we zoom out, we'll see that on the weekly chart, the price is in a strong uptrend, currently making new historical highs. This is a very bullish context, with buyers having full control over the price.
2. Price Behavior on the Break-out : Upon confirmation of a reversal pattern, you should expect sellers to jump in and drive the price down as fast as possible. It is "abnormal" to see the price returning to the previous range and gaining acceptance. This is a trigger that something is not right.
Some people will add volume analysis on the break-out, but I’m personally not a fan of it, especially for SPY.
Head and Shoulders
Renewable energy stocks coming back?I saw some other stocks of the same segment doing bullish patterns. We have a potential double bottom fighting with downtrend line resistance. I think is going to bounce back and forward between the 13.5 support level and the downtrend line until something breaks. The double bottom (inverted HS in the daily timeframe) tells me that the price wants to break up the downtrend from September 2022. SL triggers if a weekly candle breaks down and closes under the 13.5 level support.
XAUUSD forms a head and shoulders patternOn the daily chart, XAUUSD has formed a head and shoulders top pattern, and will face the risk of falling in the future. The key resistance of the current market is around 2325. If the rebound does not break this position, it is expected to continue to fall. The key support in the short term is around 2277. If it falls below, it is expected to fall sharply, and the downside target is expected to be in the 2150-2200 area.
Bitcoin Head and Shoulders dip to $60,500OKX:BTCUSDT has created a classic Head & Shoulders pattern on the daily timeframe. If it confirms below the neckline, we could see a pullback to $60,500 - the same distance from the peak of the Head to the neckline from the breakdown.
This is not actionable until it confirms, when a candle closes lower than the first candle closing below the breakdown.
Given the institutional interest and price manipulation, this could be turned around by market makers, so I won't be entering a short, or exiting my spot positions, until I see confirmation on the daily timeframe.
However, I could also see those who manipulate the markets wanting a lower entry for large amounts of institutional capital - so the price could likely be manipulated either way. What the chart tells us is this is a big bearish signal to be monitored.
There is also a Bearish Divergence on the RSI, which isn't actionable by itself, but does add a layer of confluence.
LRCX - 3 months HEAD & SHOULDERS══════════════════════════════
Since 2014, my markets approach is to spot
trading opportunities based solely on the
development of
CLASSICAL CHART PATTERNS
🤝Let’s learn and grow together 🤝
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Hello Traders ✌
After a careful consideration I came to the conclusion that:
- it is crucial to be quick in alerting you with all the opportunities I spot and often I don't post a good pattern because I don't have the opportunity to write down a proper didactical comment;
- since my parameters to identify a Classical Pattern and its scenario are very well defined, many of my comments were and would be redundant;
- the information that I think is important is very simple and can easily be understood just by looking at charts;
For these reasons and hoping to give you a better help, I decided to write comments only when something very specific or interesting shows up, otherwise all the information is shown on the chart.
Thank you all for your support
🔎🔎🔎 ALWAYS REMEMBER
"A pattern IS NOT a Pattern until the breakout is completed. Before that moment it is just a bunch of colorful candlesticks on a chart of your watchlist"
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⚠ DISCLAIMER ⚠
The content is The Art Of Charting's personal opinion and it is posted purely for educational purpose and therefore it must not be taken as a direct or indirect investing recommendations or advices. Any action taken upon these information is at your own risk.
MPWR - 4 months HEAD & SHOULDERS══════════════════════════════
Since 2014, my markets approach is to spot
trading opportunities based solely on the
development of
CLASSICAL CHART PATTERNS
🤝Let’s learn and grow together 🤝
══════════════════════════════
Hello Traders ✌
After a careful consideration I came to the conclusion that:
- it is crucial to be quick in alerting you with all the opportunities I spot and often I don't post a good pattern because I don't have the opportunity to write down a proper didactical comment;
- since my parameters to identify a Classical Pattern and its scenario are very well defined, many of my comments were and would be redundant;
- the information that I think is important is very simple and can easily be understood just by looking at charts;
For these reasons and hoping to give you a better help, I decided to write comments only when something very specific or interesting shows up, otherwise all the information is shown on the chart.
Thank you all for your support
🔎🔎🔎 ALWAYS REMEMBER
"A pattern IS NOT a Pattern until the breakout is completed. Before that moment it is just a bunch of colorful candlesticks on a chart of your watchlist"
═════════════════════════════
⚠ DISCLAIMER ⚠
The content is The Art Of Charting's personal opinion and it is posted purely for educational purpose and therefore it must not be taken as a direct or indirect investing recommendations or advices. Any action taken upon these information is at your own risk.
$DOGE - On the sweetspot, aiming towards 20$?CRYPTOCAP:DOGE has been printing a lot of bullish reversal patterns through the last weeks. An inverse head and shoulders played out, price broke over the neckline, tested it while entering a fibonacci zone and bounce from there. Next resistance should be around 0.176-018, where a small bearish fair value gap is in the daily chart, otherwise it's very likely that the price will visit 20$ soon.
STRKUSDT | Change in Trend?Is this the bottom? STRKUSDT is showing a potentially game-changing head and shoulders pattern, and we've just seen an impressive 8H candle bounce off the resistance level!
Trade Setup
This setup looks incredibly promising, with the target price of 1.8 aligning perfectly with the head and shoulders pattern target. With a solid 3:1 risk-reward ratio, this trade is shaping up to be a fantastic opportunity.
Could this be the trend reversal we've been waiting for? Let's see how it plays out!
MOJO potential for an inverse head and shoulders ...As long as price remains in the right shoulder, new entries could be rewarded on this recently created memecoin.
* I am a buyer and holder *
Low marketcap but decent volume and liquidity
DYOR by following the twitter account to see if this coin fits into your investment style and risk tolerance.
But I like what I see so far and think it could make new highs ... at some point.
Did you miss #BRETT & #ANDY ... BirdDog is "Cheap"And has structure for a continuation inverse Head & Shoulders.
Just poking above the neckline currently.
The linear projection is not that juicy tbh ..
Although this chart is in Ethereum terms not USD
Yet the LOG projection could suggest a very nice move could still occur.
And put BirdDog firmly in the $100M+ mc category.
With these Boys Club #Memecoins...
Extreme caution and research is required by yourself to determine what is the real coin and what network that coin lives on.
Altseason - are you seeing this?Others dominance may be wrapping up a right shoulder on he weekly. The right shoulder may take longer than the indicator has drawn, however so I've drawn my own next to it in white.
As confluence for this, the larger pattern began taking shape after a smaller one formed within its head.
The smaller inverted HS is already confirmed and is presently re-testing its neckline, pullbacks below failing so far. Its targets are 16% and then just slightly over 19% and just below ATH, should it hold after another test or pullback.
Targets for both:
The smaller HSi would confirm the larger one by reaching its TP 1 at 16%, and then holding above ~13.5% or so.
TP 1 as measured for the larger HSi on the non-log chart is 19.7%, or slightly above ATH.
Its logarithmic measured TP 1 is above ATH around 24.15%
Conclusion:
Altcoins may regain its prior ATH in market dominance, somewhere around 19.5%, and could approach 24-25%
ASHOKA BUILDCON BREAKINGNSE:ASHOKA is forming Dual pattern Normally a chart with dual pattern has higher probablity of giving strong breakout and here Ashoka Buildcon is forming Adam & Eve Pattern and Inverse Head & Shoulders pattern in monthly chart and in weekly chart our stocks successfully gave a huge breakout from Cup & Handle
As usual all the important fib are marked
The Target for NSE:ASHOKA will be
Target 1 :- 186
Target 2 :- 204
Target 3 :- 222
Target 4 :- 231
Target 5 :- 250
The above analysis is just sharing of knowledge and not an investment advise, we are not sebi registered and please DYOR before taking any trade as our trade idea is not entitled to your profir/loss.
If you like my analysis do comment and give a boost. It boost our energy to do more analysis.
Reverse head and shoulder on CIPLACIPLA formed a reverse head and shoulder pattern on a daily chart. One can have stop loss just below previous swing low with target the height of the head. Entry can be held just above todays high provided the same bullishness prevails. This trade offers ideal risk reward of more than 1:2.
Hope you like this idea, if so please boost this idea or leave a comment below on what you think. Otherwise happy trading :-).
LINK Potential IH&S, High Confluence, $26 Target 1, $32 Target 2🎯 TL;DR Potential IH&S + W3 Target: $26; W3 Target 2: $32; High Confluence
📈 With the recent dip to $15.3, BITGET:LINKUSDT might be forming an Inverted Head & Shoulders (IH&S) pattern with a $26 target.
The 50VWMA is acting as support in this area, and TD Sequential printed a Perfect Buy Setup (red M9) yesterday, offering additional confluence.
This retracement is also 61.8% of the previous leg up, setting a potential Wave 3 Target 1 also at $26, and a potential Wave 3 Target 2 at $32.
✅ Confirmation would be a daily close above the neckline at $19.3.
For a safer entry, wait for a daily close above $20, which is a previous resistance, a High Volume Node (HVN) and a key psychological level.
Keep an eye on $22.9 as it previously triggered a rejection.
❌ Invalidation would be a daily close below $15.3, and it would likely lead back to trading in a rectangle between $12.8 and $19.2.
If you have any questions about the TA, feel free to ask. I am always more than happy to share and discuss charts.
Not Financial Advice
CVNA Big Bullish PotentialHey guys!
Found a setup I happen to really like that Carvana NYSE:CVNA has been forming this past few months. I generally would stay away from a company/stock like Carvana, as potentially bankrupt-bound companies are not what I like to trade. But I couldn't help but realize the Cup & Handle being formed on the weekly chart currently. Below are some highlights of what I find attractive in the technical layout of this setup:
- Weekly Inverse Head & Shoulders / Cup & Handle
- Momentum is leaning bullish (TTM_SQUEEZE)
- Bought up from $20 demand zone
- Daily Chart has ema cloud bounce
- Decent Volume Accumulation
Limits to this / confirmation needed:
- Weekly ema cloud testing key area
- Monthly Ema Cloud key level as well
Closing Notes: I do believe that this technical setup is very strong. I also like that not many of the fundamentals & catalysts will likely play into this as Q3 Earnings just reported. This ER also swung a profit in EPS, and sent a pop in the stock adding to some positive sentiment surrounding NYSE:CVNA
Overall I am looking to go long on a bullish retest of some sort and wanted to share a setup I have not seen in a while!