$RVN Clear Head & Shoulders on 1hr. WATCH OUT
Clear Head and shoulders visible on the 1hr chart. This is indicative of a reversal of the previous trend. In this case that would mean a drop back down to the 570 level. Be very careful here. Look for a break below the neckline. It can hover beneath it temporarily and still continue up wards negating the pattern but the diminishing volume only reinforces the strength of this pattern. For those of you learning technical analysis, in order to measure the target of a Head and Shoulders you must measure the height of the move up and subtract that from the Breakout (or rather breakdown) Price. In this case: 740-170 = 570. Good luck and watch this carefully. Frequently after the lower target price is reached and the pattern completes the price rebounds shortly thereafter to either the breakout price or even above it which gives traders who are able to get out before the price breaks down (if it breaks down...it seems likely to) a nice play to gain more $RVN at the bottom and then ride it up for a compounded gain.
Comment:
Quick note about invalidated Head and Shoulders Patterns
Comment:
I should have updated this earlier. I forgot to mention that when a neckline holds and the Head and Shoulders pattern is essentially invalidated then the rise us is the same size but in the opposite direction. In this case up.
Comment:
I would also like to apologize about the Target price that I set for this. I published this at about 3:30am EST when I saw it. I miscalculated the length of the move. The measurement should be as follows:
Bearish breakdown: Take the length of the top of the head to the neckline and then subtract that distance from the neckline to get your downside target.
Bullish Pattern failure: If the pattern fails to complete and the neckline holds then the upside target can be obtained by taking the measurement from the top of the head to the neckline and then measuring that distance up from the top of the right shoulder.
I hope this clears everything up and helps you to make wise trading decisions in the future. Again, my apologies for the target price being off. It was late and I was really tired. Just wanted to get it out there as soon as possible once I spotted the Head and Shoulders. Will be more careful with my target measurements next time.
Bearish breakdown: Take the length of the top of the head to the neckline and then subtract that distance from the neckline to get your downside target.
Bullish Pattern failure: If the pattern fails to complete and the neckline holds then the upside target can be obtained by taking the measurement from the top of the head to the neckline and then measuring that distance up from the top of the right shoulder.
I hope this clears everything up and helps you to make wise trading decisions in the future. Again, my apologies for the target price being off. It was late and I was really tired. Just wanted to get it out there as soon as possible once I spotted the Head and Shoulders. Will be more careful with my target measurements next time.