Reverse Head & Shoulders on USA Min Vol Factor ETF, Target at 80Chart Pattern/Trend Analysis
The main view of this trade idea is on the Daily Chart.
The US Minimum Volatility Factor ETF (USMV) appears to be in a Reverse or Inverted Head & Shoulders pattern setup. The Left Shoulder is seen around the 73 support level. The Head of the setup is observed around the 70.44 low on February 24th, 2022. The Right Shoulder is seen around the 72.50 support level. The Neckline of the chart pattern setup is spotted at the lower highs of 76.82 and 75.31. USMV has broken above this neckline and is heading towards the target of 80. A negation of this chart pattern will be observed if USMV crosses back below the neckline.
Technical Indicators
The technical indicators complement this bullish Reverse Head & Shoulders chart pattern setup. USMV is above its 50-SMA on the Daily chart. Also the ETF crossed above 73.85 resistance on the Supertrend indicator and is currently in a Buy mode. The Awesome Oscillator (AO) is above 0 and green while the RSI displayed some bullish divergence as the Left Shoulder and Head of the chart pattern was forming. The RSI is currently above 50, which is a bullish indicator.
The intra-day trend following indicators of USMV Index also display uptrends in the 15-Min, 2-Hour and 4-Hour time frames. Quite recently USMV crossed above its respective trend following indicator on the 2-Hour time frame, indicating an opportunity for investors and traders to enter a long position.
Recommendation
The recommendation will be to go long at market, with a stop loss at 74.40 and a target of 80. This produces a risk/reward ratio of 1.38.
Disclaimer
The views expressed are mine and do not represent the views of my employers and business partners. Persons acting on these recommendations are doing so at their own risk. These recommendations are not a solicitation to buy or to sell but are for purely discussion purposes.
