I am looking at a stock for tomorrow that has hit support and also just formed a very solid Head and Shoulders. I am looking at a 6 month chart, and every time the price has hit this support level, the stock has bounced up and gone up at least the next 2 days. However, it just formed a textbook Head and Shoulders. Which way do I play??? The stock is MTB
That's not a head and shoulders. The volume's wrong. In any case, an H&S is a topping pattern. Though you may not be at a bottom, you're not at a top, either. What is more important here is the test of 52 and that your downtrend is still intact.
Hey, Swiss, I'm going to take a look here but on another point, if you do see something setting up, it's safe to wait for confirmation. If it's a head and shoulders let price break the neckline, on high volume, and either enter on the break down, or wait for it to come back and test the neck line again. Often time price will come back and kiss the line; the kiss of death.
Funny enought, that exactly what it looks like on the daily. A head and shoulders, witha kiss of death. The day it came back to kiss was also an extremely light volume day. But I don't know if that's worth much of anything, that's more related to the market having no volume the past couple of days. I don't see why a head and shoulders can't form any where it likes, but I would love to learn more about that. Anyway, a monthly chart really clears all this up. If you look on the monthly you can see that we're sitting at very major support. That what would be a right shoulder could be unreliable since it formed during this time.