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Head_and_shoulder

FrogAlgo: Head and Shoulder PatternThe head and shoulders pattern is a well-known chart pattern utilized in technical analysis to anticipate potential reversals in price trends. It derives its name from its visual resemblance to a head and two shoulders. Typically forming after an uptrend, this pattern is considered bearish and indicates a potential reversal in the market. Here are the main characteristics of a head and shoulders pattern: - Formation: The pattern consists of three peaks or highs, with the middle peak (the head) being the highest and the two outer peaks (the shoulders) slightly lower in height. The lows between the peaks form the neckline valleys. - Neckline: The neckline acts as a support level, connecting the lows between the peaks. It serves as a crucial level for confirming the pattern. The neckline can slope upward, downward, or be horizontal. - Volume: Volume plays a significant role in confirming the pattern. Typically, volume is higher during the formation of the left shoulder and the head, and lower during the formation of the right shoulder. A notable increase in volume can occur when the price breaks below the neckline, confirming the pattern. - Breakout: The pattern is considered complete when the price breaks below the neckline. This breakout serves as confirmation for the bearish reversal, signaling a potential shift from an uptrend to a downtrend. - Price Target: To estimate the potential downside target, measure the vertical distance from the neckline to the top of the head, and subtract that distance from the breakout point. This projected target represents a potential price level that the asset could reach after the pattern is confirmed. - It is important to note that the accuracy of the head and shoulders pattern, like any other chart pattern, is subjective and can vary depending on several factors. Factors such as the timeframe, market conditions, and the quality of the pattern itself can influence its accuracy. - Traders and analysts often use additional confirmation signals and indicators, such as volume analysis, momentum oscillators, and trendlines, to increase the reliability of their predictions when identifying head and shoulders patterns. While the head and shoulders pattern is widely recognized and utilized by technical analysts, it is important to incorporate it into a comprehensive trading strategy that considers other factors such as fundamental analysis, market sentiment, and risk management.
AMEX:SPY
by A1TradingHub
GBPCHF Head and Shoulders PatternThere is a head and shoulders pattern on the 4H timeframe on GBPCHF that has formed at a resistance level and now starting to show weakness as the uptrend runs out of steam.However I strongly recommend waiting for the neck line to be broken first and then enter a short trade.Also another confluence for this trade is the RSI divergence suggesting a downtrend.The trade setup for this would be to enter at the break of the neckline(wait for candle close) which is also a flip zone( resistance turned to support) and set stop loss at 1.14444 and take profit at the second support level at about 1.11679 Trade Setup: Entry - at the break and close of neckline Stop Loss - 1.14444 Take Profit - 1.11679
Short
by fayezhazzem
Why do Patterns fail so often?To answer this question, let's try to take a classic Pattern as an example: the "Head and Shoulders" . Typically Traders take short position (in this example) on neckline breakout and place stop loss above right shoulder or head. If we only take these elements into consideration, it often happens that pattern fails. Why does this happen? Because these elements are not enough and we need to use some "filter". One of these filters, and perhaps the most important, is the "placement". For example, the Head and Shoulders is considered a Reversal Pattern that should only appear at the end of a Trend, and this is where the "Elliott Waves" come into play. In fact Elliott claims that a Trend is formed of 5 waves (3 + 2) and often the first signal of the end of the trend is the first bearish leg after wave 5 (Wave A). Another important filter could be RSI indicator because often some divergence also appears in wave (5). In conclusion, the Patterns work very well on the market but you also need to learn how to use them correctly, trying to use some filters to get some more confirmation and limit losses as much as possible. Naturally these considerations are personal and come only from my experience, but they are absolutely subjective and therefore open to criticism. ...I hope I was helpful.
Education
by TheAnonymousBanker
4
DJI - Bullish H & S pattern #stocksMarket sentiment has changed with the fed pausing interest rate's. possible we see this bullish move, but this doesn't mean Bull market. zooming out you can see, this will break ATH and possible to complete an old wycoff accumulation extension. My thoughts.. we may get the break out from all time high with the fed easing, but this is likely to be a bull trap! Im still expected the Dow to take out the lows, later on in the year possibly when we see further rate hikes! Suspected a recovery based off a W pattern I see forming on the US30, link attached below. Originally I was very bearish once the price rejected 0.702 fibonacci retracement levels twice. now its very possible to see a bullish recovery, will do great for market sentiment! but I would be very weary once this H & S completes this pattern.
TVC:DJILong
by dibz1996
BTC monthly Head and ShoulderHello Birdies, I know many people not gonna like this. But I cant resist to post this idea. No matter what you say the head and shoulder is bright as sun. If this got validated GOD!! The demand zones are marked by monthly and weekly. The strongest demand zone is at 9k-10k. If it fails I dont think weekly zone gonna hold. It will fall to next Monthly Zone. I dont know fundamental and by design I am only telling what chart is saying.
BITSTAMP:BTCUSDShort
by BlackBirdTrading
65
TCS BULLISH DIVERGENCE TRADE SIGNAL - BUY(a) TCS has formed a strong bullish divergence pattern on the daily chart indicating bullish movement (b) It has also CROSSED OVER 200 SMA recently making the likelihood of the bullish movement even more stronger (c) On top of that it has also broken out of the resistance NECKLINE of the recently formed HEAD & SHOULDER pattern which it had earlier respected & had tested a few days ago (d) All these above mentioned patterns are indicating that tcs is ready for a ride upwards
NSE:TCSLong
by peace_lover
Nifty Trade Setup (13-June-2023)This will be my personal trade Setup, This is not an advice of any kind to initiate trade according to this setup. This is for only for my learning purpose and maintaining my trading journal. Head & Shoulder pattern on higher time frame of Nifty. If nifty respects this pattern then we can expect good move downward. On Upside Resistance is at : 18660,18777. On Downside support is at : 18550,18500, (If market respects pattern then 18400 last support. From last week all indices are range bound and not good for directional trades setups. For Trade Setup today: 1.) Will buy if break and sustain above 18660 for target of 18720, 18750. 2.) If price breaks down and sustains below 18550 ( Neckline of Head & Shoulders pattern ) then will short for target of 18502, 18460. No trades if gaps and if there is no clear movement or there are overlapping candles.
NSE:NIFTY
by TradeInsights
The Bears Can Smell The MenstruationExpected Path (solid black): - Drop to 396-401 by May 5th (this would mean a very bearish upcoming week - has the setup if SPY stays under 418, I'm seeing gap down next Monday and then sell off) - Then bounce to test 408-412 by May 12th; if rejected under 412 then it will continue back down to 388-393 range by end of May Most Bearish path - solid pink (head and shoulders break down, seeing distribution recently at the 410-415 levels): - Drop to 385-388 by May 12th - I'm in puts obviously because this is possible More Likely Bearish path (dashed red) - Drop to 398 - 402 by May 19th - If 400 holds as support I'll become bullish Alt Path - Bullish (dashed green) - Run to 418-423 by May 11th, then pullback to test 414-416 for support - If that were to play out then a break back above 423 could send it to 430 (in which case the bears would Still be able to smell the menstruation and it would get wrekd) In summary, breakdown level is 401.48; breakout level is 422.99 I'm expecting SPY to be trading near 406 in July, but until then there will be tradable swings in the 380-430 range. Regaurds ~ Brick.
AMEX:SPYShort
by JerryManders
16
📊How To Trade: H&S Pattern📍How to Identify and Use the Head and Shoulders Pattern The head and shoulders pattern is characterized by key features to look out for on trading charts. It typically occurs after a bullish uptrend when buying pressure begins to fade. The pattern includes a left shoulder, a higher middle peak, and a right shoulder approximately at the same level as the left shoulder. Additionally, the pattern should have a distinct neckline acting as a support level. ✔️To successfully identify and trade the head and shoulders pattern, consider the following step-by-step approach: 🔹 Look for three distinct tops , namely the left shoulder, head, and right shoulder, which occur after an uptrend. 🔹 Identify the neckline support level , which connects the lowest points of the left and right shoulders. 🔹 Wait for a breakout to occur, confirmed by a candle closing below the neckline. 🔹 Once the breakout is confirmed, place a selling order to capitalize on the bearish reversal signaled by the pattern. 🔹 Implement a stop-loss order above the neckline, ideally positioned at the highest level of the right shoulder, to manage risk effectively. 🔹 Consider using a risk-reward ratio to determine a suitable target for taking profits, ensuring the potential reward justifies the risk taken. Lets consider the following example below as a step by step to identify the pattern. This is what it would look like in a real scenario: Step 1: Price is moving on an uptrend and starting to form the head and shoulder peaks Step 2: We can identify the neckline which we can observe price react as a temporary support which connects the lower peaks. We need to wait for a clear breakout in order to find an entry insert s2.png image here Step 3: Price broke below the neckline and re-tested the neckline so we enter a short position on the re-test with taking profit target the length of the head to neckline insert s3.png image here Step 4: We can see the pattern was correct and it hit our targets insert s4.png here 👤 @‌QuantVue 📅 Daily Ideas about market update, psychology & indicators ❤️ If you appreciate our work, please like, comment and follow ❤️
Education
by QuantVue
9
BTC 0 or hero? 📈 Chart Analysis: falling wedge: Top tip wait for breakout and retest of the AVWAP before taking a long, however we did get an engulfing candle on the reaction from the 150ema so i have gone long already trying to front run patterns is not the best thing to do so be cautious if you are to do the same! We got the retest of the Head and Shoulders resistance in prep for the latest sec vs binance news which took us to out first target 150EMA: top tip play any SHORTS super carefully here as the reaction from the 150 was extremely bullish but know we could still see out lower avwap target currently at the 18k area 😉 additional info! Currently in a Stage 3: where we look for Bullish continuation patterns (falling wedge) and/or topping patterns Head and shoulders OBV still in a stage 1 and looking weak! 🔔 Risk Management: Adjust your position size based on your risk tolerance and use proper risk management strategies, such as trailing stop losses, to lock in profits as the price moves in your favor. ⚠️ Disclaimer: This analysis is for educational purposes only and should not be taken as financial advice. Always conduct your own research and consult with a financial advisor before making any trading decisions.
BITSTAMP:BTCUSD
by mammamia2
GBPUSD as Head and Shoulders Pattern Emerges 📢Pair Name: GBP/USD Time Frame: 1hrs Chart Direction: short Comment: 📊 Currently, a distinctive chart pattern known as a "head and shoulders" has emerged within a rising channel, indicating a potential shift in market dynamics. 💱 Upon closer examination, I perceive the head of this formation to be a mere retracement, hovering around the 1.2450 mark, within the borders of the rising trend line. Consequently, I anticipate a continuation of the downward trend. 📈 Once the rising trend line (represented by the blue tunnel) is breached, it's highly likely that we will witness a significant drop towards the 1.2200 level. At this point, we encounter a support level, which could prompt the market to pause and contemplate its next move. ------------------------------------------------------------------------------------------------------------------------------------------------ Remember, this contribution serves as an informative analysis and should not be construed as financial advice. Stay informed, stay connected, and happy investing! 🌟📈 ------------------------------------------------------------------------------------------------------------------------------------------------ 💼💰❤️ Trade like a pro, laugh all the way to the bank! Like and subscribe for more money-making !" 💼💰❤️
Short
by michaelmolek
Renegen lower ?So much hipe in this stock during 2022, and for good reason with its helium and natural gas story. However, this is a high risk stock as it is still in its baby shoes. Technical sentiment indicates that we might see #Renegen price even lower. The downtrend in #Renegen share price is now trading on the right shoulder neckline of the head & shoulders pattern it has formed, with a potential price target of R10.90. Tailwind for even lower prices is the broad negative sentiment in the markets due to macros and SA specific issues such as loadshedding.
JSE:REN
by chsmit
2