Following on from the discussion today on the previous blog entry, here we have a possible inverse head and shoulders formation as identified by Gary. This is, of course, conditional upon price returning to the "neckline" and then breaking through.
I've shown here how we would calculate a target from such a pattern - we take the difference between the top of the head and the neckline (vertically) and the plot that from the breakout point (which I've just put there for illustrative purposes).
I've also drawn a horizontal line which could be another iHS but this one seems unlikely to me.
I'm not sure of this is exactly the form Gary was talking about but I'm sure he'll enlighten us later on.
From my own point of view, I'm not a big fan of H&S formations unless they're really clear and the neckline is fairly horizontal. Anyway, we just about hit the 61.8% Fib target today with a price low of 142p (and a possible hammer at close on the hourly though that is only really a half hour). I'm still not completely convinced that this level will hold but we're in target territory so I was happy to pick a few of these up today.
I've shown here how we would calculate a target from such a pattern - we take the difference between the top of the head and the neckline (vertically) and the plot that from the breakout point (which I've just put there for illustrative purposes).
I've also drawn a horizontal line which could be another iHS but this one seems unlikely to me.
I'm not sure of this is exactly the form Gary was talking about but I'm sure he'll enlighten us later on.
From my own point of view, I'm not a big fan of H&S formations unless they're really clear and the neckline is fairly horizontal. Anyway, we just about hit the 61.8% Fib target today with a price low of 142p (and a possible hammer at close on the hourly though that is only really a half hour). I'm still not completely convinced that this level will hold but we're in target territory so I was happy to pick a few of these up today.