Head: $3.4.
Left Shoulder: $2.9.
Right Shoulder: $3.0.
The Neckline: $2.00.
Components of the Pattern:
Left Shoulder: Represents the first peak at $2.9, where the price rose and then retreated to the neckline at around $2.00.
Head: The highest peak at $3.4, the topmost point of the pattern, followed by a retreat to the neckline at $2.00.
Right Shoulder: The second peak at $3.0, lower than the head, followed by a retreat to the neckline at $2.00.
Neckline: Remains at approximately $2.00, a horizontal support level connecting the lows after the left shoulder and the head and the right Shoulder.
Implications of the Pattern:
The pattern remains a bearish reversal pattern, indicating a weakening of bullish momentum after reaching the head at $3.4.
If the price breaks below the neckline ($2.00) with increased volume, this confirms the pattern’s completion and signals a significant decline.
Current Situation (March 2025):
The current price ($2.2) is very close to the neckline ($2.00), making a breakout likely in the coming days.
The potential crossover of the moving averages (blue and red lines) supports the possibility of a trend change.
NOTE:
If the price bounces off the neckline ($2.00) with increased volume, this invalidates the pattern.
In this case, the price might attempt to retest resistance at $3.0 (right shoulder peak) or even $3.4 (head peak).
Conclusion:
The Head and Shoulders pattern: indicates a strong potential for a bearish reversal, if the price breaks below the neckline ($2.00). Confirmation of the breakout with increased volume is essential, while considering fundamental news that might influence the market.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.