Last week I was cautiously optimistic that the EuroStoxx would move higher to 3500, and possibly break from there to complete the mini (inverted) head and shoulders that can be identified since the 30th October 2017. However this week's action adds to a more bearish, alternative path.
The blue support zone is a loosely defined price range of significance; this area has repeatedly acted as a support over the last 12 months. Since the January 2018 correction, all subsequent rallies from this range have failed. The index is now for the sixth time in this blue support zone. Moving averages, RSI and price are all negatively aligned.
Today's price movement is also completing a head and shoulders pattern that has developed since January 2017.
The blue support zone is a loosely defined price range of significance; this area has repeatedly acted as a support over the last 12 months. Since the January 2018 correction, all subsequent rallies from this range have failed. The index is now for the sixth time in this blue support zone. Moving averages, RSI and price are all negatively aligned.
Today's price movement is also completing a head and shoulders pattern that has developed since January 2017.
Comment:
And the head & shoulders pattern completes... beware!