Arm Holdings (ARM) - Head and Shoulders Pattern, Target $78-$94Overview: Arm Holdings (NASDAQ: ARM) is forming a classic Head and Shoulders pattern, a bearish reversal pattern that signals a potential drop in price. The pattern is visible with a left shoulder, head, and right shoulder clearly defined. The neckline support is around the $140 area.
Technical Setup:
Pattern: Head and Shoulders
Breakdown Level (Neckline): ~$140
Target Zone: $78 - $94, as projected from the height of the head to the neckline
Key Resistance: $164 level (former high)
Earnings Catalyst: With earnings approaching, the release could act as a potential catalyst to expedite the completion of this pattern, either causing a breakdown below the neckline or a temporary rebound before further selling pressure.
Price Action:
A breakdown below the neckline could see the price falling to the target zone of $78 to $94.
Watch for any bounce around the neckline, which might offer a better risk/reward entry on confirmation of the pattern's completion.
Risk Management:
A daily close above the right shoulder (~$148) would invalidate the pattern and warrant a reevaluation of the setup.
