Wednesday, March 19, 2008

Could it happen - An Inverted Head and Shoulders?

A head and shoulders formation is a chart pattern in which there is a top, a higher top, and a lower top. This forms a triple top and is a topping pattern seen in market chart patterns. A line drawn below the lows of these tops is called the neckline. The distance from the neckline to the top of the head is said to be the distance a move could take in the other direction once the neckline is broken to the other side. The same pricipal holds for an inverted head and shoulders, an upside down head and shoulders. A 20 day 4 hour chart below illustrates this idea. Will it happen? I don't know but I believe it is possible. We will just have to wait and see.

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