Why not? All of them fit the definition: "In technical analysis, a common chart formation in which a share price reaches a peak and declines, rises above its former peak and again declines and rises again but not to the second peak and then again declines. The first and third peaks are 'shoulders', while the second peak is the formation's 'head'. When the price falls from the right shoulder and breaks through the neckline the Head and Shoulders Top formation has been confirmed and it is regarded by technical analysts as a signal to sell the share."
Here, I attached another pic with the necklines: More importantly, with the current H&S, you'd have to wait until NAZ falls to about 2540 for a "confirmation" (from the high of about 2630). By definition, you'd be selling low and buying high, which is exactly the opposite of what makes money in the markets. In fact, if you faded each of the 5 circled "bearish" H&S formations, you'd make quite a bit of money.
H&S is meant to be a highly interpretive signal and so you're right to be open with your interpretation on the chart, but not Pamela Anderson open. I still only see the 2nd one on the left and the current one potentially forming. Anyone else want to chime in, I'm curious about what others think from experience. Thanks.
Indeed it is, dont count on it breaking that neckline, were in the last two weeks of Q2, institutions and fund managers will support the market. Then we get into earnings, I am sure the are going to be dandy. One thing that is certain, wallstreet is geared to the upside. Buy buy buy buy.
agree, i did not start the thread as a call of the top of mkt, just merely to point out that right now (as of today), there is a possibility of a very "textbook" h&s pattern. i agree that interpretation's of the pattern vary, i would just say that so far, this one is much more technically sound then the others pointed out on the same chart. very clear rallies, w/ some white space inbetween, where the others were more one rall, and then a return into consolidation. the volume pattern even is technically sound on this one, with a pickup from the head down to shoulder, and an ease in volume on this latest rally to the potential left shoulder. anyway, it is hard to trade a h&s, and anticipating one from the right shoulder provides you with a lot better risk:reward than waiting for a neclkine. again, if that high of today gets taken out by any meanigful amount, the whole pattern is out the window. i don't hold positions overnite, other than in my ira, but if we gapped down and could not rally, or we barely take out today's high and get pushed back under, i'd consider buying QID in my ira for a longer term play on this pattern.
It's obvious by most of the responses, people put very little thought into H&S formations anymore. I know I never did. It was too subjective for me. However, it seems when one attempts to find patterns to trade, they're better suited curb fitting there analysis with the trend. You'd probably have more success identifying H&S bottoms to trade than tops.
here is what i see as neckline. on a side note, i wish there were more threads on this site about charts or trading techniques. seems like most is just people blindly saying what they want the mkt to do. i appreciate the responses.
It's obvious by most of the responses, people put very little thought into H&S formations anymore. I know I never did. It was too subjective for me. However, it seems when one attempts to find patterns to trade, they're better suited curb fitting there analysis with the trend. You'd probably have more success identifying H&S bottoms to trade than tops. IMO