Inverse Head and ShouldersNTES has formed a cup but there is no handle...yet.
It is possible that the handle is at the top of the cup but I did not try to guess where the handle is. When the handle is at the cup high, it often leads to an explosive break out. But it is also possible the stock will pull back and form a handle in the near future.
In a bullish stock and a bullish market, the 1.272 fib level and above can come in to play
Also an inverse Head and shoulders and has surpassed neckline. (NL) The neckline which was resistance, now serves as support..
Overbought conditions are close on daily RSI. RSI is set on 80 and 30. Stocks can hover there for a while and may dip in and out of overbought conditions for a prolonged period of time. It is not overbought on weekly or monthly,
The inverted head and shoulder pattern is formed in the downtrend. It’s formed because of the change in how investors perceive the stock or the stock market. The stock is trading lower or at the bottom. Not the case here as NTES was not at the bottom. This drives some investors to buy the stock. The stock prices rise to form the pattern’s left shoulder.
The temporary downtrend drives the stock down. Investors buy the stocks because they anticipate that the trend will reverse. The stock price increases. The psychological or fundamental factors drive the stock prices. As a result, the head of the pattern is formed.
The stock corrects and reaches the same bottom level as the left shoulder. Since it’s at the support level, it rises back to the neckline level—or resistance level. This forms the right shoulder. The right shoulder is approximately the same height as the left shoulder.
Not a recommendation
