Head and ShouldersPossible Targets listed in orange below structure. The first target was 926.15 and this has surpassed that.
This could stop falling if market turns around so targets are only "possible" targets down.
Price has crossed below neckline with a confirmed downtrend.
Possible stop above neckline or where you see resistance.
No recommendation.
A head and shoulders pattern is a chart formation that appears as a baseline with three peaks, where the outside two are close, not exact, in height and the middle is highest. In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. This pattern can have more than one Head and more than 2 shoulders nd is then called a complicated H&S.
The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns. It is one of several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end.
A head-and-shoulders takes place on a chart (on any time frame), when a stock (for example) rises in an uptrend to a new high. Strong volume lifts the price action to the peak of what results in the top of the left shoulder. Next, the pullback takes place and the left shoulder is complete. The pullback is a reflection of mass psychology when latecomers jump into the game during this pullback pushing the security higher and the top of the Head forms. The stock tumbles down to the prior support area formed by the completion of the left shoulder. The Head and left shoulder are now completely formed. At this area, known as the neckline (of the finished pattern), a small group of hopeful buyers pushes the price up again. This time, however, the optimism is fading and price moves up only to the top of the left shoulder, if that high. Volume dissipates and the price rolls over, forming the top of the right shoulder. The neckline is support as price has tested this area before. The pattern is not valid until the neckline is clearly broken with a downtrend. In come cases, especially in a very bullish market, this can be a very long time and the pattern may fail as price goes on to make new highs.
This pattern does best in a bear market. The Inverse Head and Shoulders, or H&S Bottom which is simply the Head & Shoulders pattern flipped over, does best in a bull market.
