A continuation head and shoulder pattern is a rare pattern. Normally, head and shoulder patterns are reversals. Rarely, we have a head and shoulder which is formed in the middle of a trend. The Nifty has made a bearish head and shoulder pattern inside an ongoing downtrend. Here is the chart:
The neckline was violated for the past two days. We can assume a rally on Friday which is likely to push prices back inside the neckline. If prices go above the right shoulder, this pattern is cancelled. But, the right shoulder is far away, so a stop should be above 4880 – the is the high of the day which was completely above the neckline.
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4 comments:
Have we made double bottom at 4730 or double top at 5160? What do you feel.
Sir
So far I know H&S(top and bottom) patterns as only reversal patterns. Surprised to know that they can also form in an ongoing trend(up or down).
Happy that I came to know a new point today.. It is the advantage of following your blog sir..
Thanks and Regards
Balu
Sir im new to TA , but i think L&T also made a continuation H&S after it broke from its peak (that too incidentally was an H&S).
L&T also made a continuation H&S after it broke from its top (which also incidentally was an H&S)
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