I believe this is what would be classified as a complex head and shoulders top and according to Magee's trading tactics this is basically where you go short on this formation. There are different schools of thought on how to trade these patterns but the "safest" way is to basically wait for the neckline to break and then short a retrace (40% or more of the move up to neckline). Based off of this, this seems like a good short entry. Also plays into Edwards' three fan principle, suggesting we are officially downtrending according to the principle... after the 3rd fan line is broken. I know I sound like a fanboy but fleshing these ideas out is more for my own benefit than anything so I can go back to look how they play out.
The different horizontal lines on the chart are the 3 different measurements of possible necklines. I believe we are going to the lowest one, where we also consolidating in the past.
Good luck and happy dumping!
The different horizontal lines on the chart are the 3 different measurements of possible necklines. I believe we are going to the lowest one, where we also consolidating in the past.
Good luck and happy dumping!