BIST30 (USD) Monthly: Head & Shoulders Confirmed? Neckline RetesType: Bearish
The Turkish Stock Market (BIST30 or XU030), when viewed in US Dollar terms on the monthly chart, presents a textbook Head and Shoulders (H&S) topping pattern.
We can observe the Left Shoulder, a higher Head, and a lower Right Shoulder, indicating waning bullish momentum at the peak of what has been a significant rally.
The fact that this pattern is forming on the monthly timeframe underscores its long-term significance, suggesting a major structural shift rather than just a short-term correction.
The Neckline Break & Retest:
Crucially, the BIST30 (USD) has recently broken below its multi-month neckline, a key support level that connected the lows between the shoulders and the head. This breakdown served as the initial confirmation of the H&S pattern.
What we are witnessing now is the classic retest of this broken neckline. Price has rallied back towards this former support, which now acts as strong overhead resistance.
This retest often provides a 'last kiss goodbye' before the larger bearish move unfolds.
The market's reaction at this retest level will be paramount. A strong rejection from the neckline, potentially accompanied by increasing bearish volume or bearish candlestick formations on lower timeframes (e.g., weekly), would further validate the H&S breakdown and strengthen the bearish outlook.
Potential Price Target:
Based on the classic H&S methodology, we can project a potential price target. By measuring the vertical distance from the peak of the 'Head' to the neckline and projecting it downwards from the breakdown point, we derive a preliminary bearish target around 220 USD for BIST30 (XU030)
