AAL - 21 months HEAD & SHOULDERS TOP FAILURE
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Since 2014, my markets approach is to spot
trading opportunities based solely on the
development of
CLASSICAL CHART PATTERNS
🤝Let’s learn and grow together 🤝
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Hello Traders ✌
Here we have a quite rare Head & Shoulders (H&S) Top Failure. As you can see, a classical H&S was developing at the all-time high, along the 200 Days EMA and was ready to also breach a multi-year long Trendline (white dashed line) dated back to January 2016. That was an excellent scenario with possible strong bearish implication ahead.
An H&S Top Failure pattern is a H&S with ALL its preliminary conditions met which "fails" to breach its neckline (Line1) and then sharply reverse resuming the uptrend. This "failure" pattern requires the right shoulder to be completely formed! This means that price has to almost reach and touch the neckline (as in this case) before reversing. A valid breakout will be when price breaches the right shoulder's high (Line2).
In this specific case, after completing the H&S Top Failure, price consolidates in the form of a Rectangle which is now attempting a breakout (orange lines) and so confirming the possible market direction (see daily chart for better understanding this last price action). Both targets are below the all-time high so we can expect price to be kind of "attracted" to it.
Sorry for this quite long post, but it was very useful from a didactical perspective.
Entry Point and Initial Stop Loss depends on your Trading Plan Tactics and Money Management rules.
🔎🔎🔎 ALWAYS REMEMBER
"A pattern IS NOT a Pattern until the breakout is completed. Before that moment it is just a bunch of colorful candlesticks on a chart of your watchlist"
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⚠ DISCLAIMER ⚠
The content is The Art Of Charting's personal opinion and it is posted purely for educational purpose and therefore it must not be taken as a direct or indirect investing recommendations or advices. Any action taken upon these information is at your own risk.
═════════════════════════════
Since 2014, my markets approach is to spot
trading opportunities based solely on the
development of
CLASSICAL CHART PATTERNS
🤝Let’s learn and grow together 🤝
══════════════════════════════
Hello Traders ✌
Here we have a quite rare Head & Shoulders (H&S) Top Failure. As you can see, a classical H&S was developing at the all-time high, along the 200 Days EMA and was ready to also breach a multi-year long Trendline (white dashed line) dated back to January 2016. That was an excellent scenario with possible strong bearish implication ahead.
An H&S Top Failure pattern is a H&S with ALL its preliminary conditions met which "fails" to breach its neckline (Line1) and then sharply reverse resuming the uptrend. This "failure" pattern requires the right shoulder to be completely formed! This means that price has to almost reach and touch the neckline (as in this case) before reversing. A valid breakout will be when price breaches the right shoulder's high (Line2).
In this specific case, after completing the H&S Top Failure, price consolidates in the form of a Rectangle which is now attempting a breakout (orange lines) and so confirming the possible market direction (see daily chart for better understanding this last price action). Both targets are below the all-time high so we can expect price to be kind of "attracted" to it.
Sorry for this quite long post, but it was very useful from a didactical perspective.
- Pattern Class: 🌕🌕🌕🌕🌕
- Target area: see chart
- Breakout area: see chart
Entry Point and Initial Stop Loss depends on your Trading Plan Tactics and Money Management rules.
🔎🔎🔎 ALWAYS REMEMBER
"A pattern IS NOT a Pattern until the breakout is completed. Before that moment it is just a bunch of colorful candlesticks on a chart of your watchlist"
═════════════════════════════
⚠ DISCLAIMER ⚠
The content is The Art Of Charting's personal opinion and it is posted purely for educational purpose and therefore it must not be taken as a direct or indirect investing recommendations or advices. Any action taken upon these information is at your own risk.
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