Cookie Policy

Welcome, Guest
Username: Password: Remember me
chit chat

TOPIC: H&S formations

H&S formations 13 May 2013 20:18 #1

  • remo
  • remo's Avatar
  • OFFLINE
  • Moderator
  • Posts: 2803
  • Thank you received: 5120
  • Karma: 111
beachvibes wrote:
Thanks Jackozy, does this mean the consolidation of shares could affect charting or how people see it by TA?

Yep it has a big impact as it messes the charts up. Good charting software can get around this but you should still be cautious until the share trades for a few months after the rights issue.(i think thats what its called).
Information Purposes Only, Do Your Own Research
remo
The administrator has disabled public write access.
The following user(s) said Thank You: beachvibes

H&S formations 13 May 2013 16:39 #2

  • beachvibes
  • beachvibes's Avatar
  • OFFLINE
  • Fresh Boarder
  • Posts: 11
  • Thank you received: 5
  • Karma: 1
Thanks Jackozy, does this mean the consolidation of shares could affect charting or how people see it by TA?
The administrator has disabled public write access.

H&S formations 13 May 2013 16:36 #3

  • Jackozy
  • Jackozy's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 869
  • Thank you received: 2261
  • Karma: 47
Thanks, BV. I guessed there was a consolidation but the charts still differ - I don't have that drop to c. 50p for your "head"...
The administrator has disabled public write access.

H&S formations 13 May 2013 16:30 #4

  • beachvibes
  • beachvibes's Avatar
  • OFFLINE
  • Fresh Boarder
  • Posts: 11
  • Thank you received: 5
  • Karma: 1
That will be because of the 20:1 consolidation around the period of your spike on the chart.
The administrator has disabled public write access.

H&S formations 13 May 2013 16:27 #5

  • Jackozy
  • Jackozy's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 869
  • Thank you received: 2261
  • Karma: 47
Hi beachvibes,

My weekly chart of CNR covering the same period of time looks nothing like yours:

CNRweekly13_05_13.gif


dl.dropboxusercontent.com/u/20815047/CNRweekly13_05_13.gif

The current price is well below what you've labelled as the head on my chart.
The administrator has disabled public write access.

H&S formations 13 May 2013 16:18 #6

  • beachvibes
  • beachvibes's Avatar
  • OFFLINE
  • Fresh Boarder
  • Posts: 11
  • Thank you received: 5
  • Karma: 1
Jackozy or anybody else interested, does this look like it could be an ih&s pattern with the right shoulder forming at the moment? Fairly big moves of the past.

content.screencast.com/users/oiljim53/fo...6b52b3d/00000064.png
The administrator has disabled public write access.

H&S formations 13 May 2013 15:18 #7

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
Thanks for that RC, I've made a note of it and will try to incorporate it into what I'm doing. Appreciate that you took the time to share it.
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.
The following user(s) said Thank You: redchilly

H&S formations 13 May 2013 13:44 #8

  • redchilly
  • redchilly's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 581
  • Thank you received: 1096
  • Karma: 31
Shotry,
Numerous I H&S patterns (& H&S patterns) appear every day and they are fairly easy to spot. Most of the miners have been in a prolonged downtrend and we will soon see I H&S patterns appear on many of the mining stocks. Problem is not normally whether the pattern exists but whether it is strong & reliable for a profitable trade. For that you need to be familiar with recognizing TRENDS and in particular STRENGTH of a TREND to successfully trade these patterns. They can appear at the bottom of the downtrend, middle of an uptrend or at the (potential)top of an uptrend.

If you are a beginner then you should stick to those which appear at the bottom of a downtrend.

A few points that might help you in future to make better entries at I H&S patterns (opposite for H&S ) & hopefully profitable trades!
1.Look for I H&S which are forming below 200DMA (for daily and weekly time frame).
2.Duration of the downtrend before which it enters the I H&S pattern. On the Lloyds chart which Jackozy has posted today you could see that the down move started in September 2010 and lead to the beginning of I H&S in August 2011 (roughly 12 months). The pattern itself took 12 months to develop. Break of neck line occurred in September 2012 (12 months). It was a classic and a reliable pattern. Look for an inbound trend that is longer than the duration of the pattern (John Lansing’s Trending 123). A shallow inbound trend may indicate a period of consolidation & hence can create a lot of whipsaws and choppy moves (means more chances of getting stopped out & hence less reliable) before the price move indicated by the pattern eventually begins.
3.Volume – highest on the left shoulder + lowest on the right with a burst in volume on break of the neck line.
4.Slope of the neck line – an upward slopping neckline is more bullish than a downward sloping one.
5.Try to trade this patterns in more liquid markets like FTSE100/forex rather than AIM stocks.
dyor
redchilly
Last Edit: 13 May 2013 13:45 by redchilly. Reason: typo
The administrator has disabled public write access.
The following user(s) said Thank You: remo, WaveSurfer, Shotry, annes goal, diver993, Jackozy, Amo

H&S formations 13 May 2013 12:34 #9

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
I'm assuming you mean Amur?
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.
The following user(s) said Thank You: remo

H&S formations 13 May 2013 12:26 #10

  • remo
  • remo's Avatar
  • OFFLINE
  • Moderator
  • Posts: 2803
  • Thank you received: 5120
  • Karma: 111
hi shotry
thanks for highlighting that chart
Ive gone long on it due to that chart.lol ;) ;) ;)
Information Purposes Only, Do Your Own Research
remo
The administrator has disabled public write access.

H&S formations 13 May 2013 11:58 #11

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
I watch out for them and understand that they're one of the more reliable chart patterns (I have Bulkowski's pattern encyclopedia here). I sometimes trade them, sometimes they're profitable. I don't just follow the target regardless. I keep watching what the price and my indicators are doing and either stay in or leave the trade according to that.
I feel as as though I'm waffling and running all over the tune without ever striking a note? Is there something more specific you want RC?
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.

H&S formations 13 May 2013 11:31 #12

  • redchilly
  • redchilly's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 581
  • Thank you received: 1096
  • Karma: 31
Shotry,

What sort of experience do you have in trading H&S patterns?
dyor
redchilly
The administrator has disabled public write access.

H&S formations 13 May 2013 10:46 #13

  • Jackozy
  • Jackozy's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 869
  • Thank you received: 2261
  • Karma: 47
Cup and handle, iH&S, ascending triangle...they're all the same pattern to me. They're all wave sequences as we move from a correction into an uptrend :-)

Shotry, I'm not sure our views are that different - I agree with remo that these patterns are far more significant at the tops and bottoms of ranges. What constitutes a "range" all depends on your timeframe though. A downtrend on a 5 min chart can be just a small correction on a daily chart...
The administrator has disabled public write access.
The following user(s) said Thank You: remo, WaveSurfer

H&S formations 13 May 2013 10:37 #14

  • remo
  • remo's Avatar
  • OFFLINE
  • Moderator
  • Posts: 2803
  • Thank you received: 5120
  • Karma: 111
It even looks like a massive cup and handle ;) ;) ;)
Information Purposes Only, Do Your Own Research
remo
The administrator has disabled public write access.

H&S formations 13 May 2013 10:35 #15

  • remo
  • remo's Avatar
  • OFFLINE
  • Moderator
  • Posts: 2803
  • Thank you received: 5120
  • Karma: 111
Hi shotry
That chart looks like an inverse head and shoulders. Not the perfect place as its come of the lows but its still close enough to the lows.Its been sideways for a year. A finish above 9.26 would be bullish but id be more comfortable with a finish above 9.50

Information Purposes Only, Do Your Own Research
remo
The administrator has disabled public write access.

H&S formations 13 May 2013 10:33 #16

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
So in effect we have different views on this pattern. On the one hand it should be at the top (H&S) or bottom (iH&S) of a price movement, however a similar pattern (perhaps there are alternative names) do have some validity away from the tops/bottoms? Are those formed at the tops/bottoms more powerful as indicators?
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.

H&S formations 13 May 2013 10:27 #17

  • Jackozy
  • Jackozy's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 869
  • Thank you received: 2261
  • Karma: 47
Here's an example using LLOY's current chart:

LLOYHS.gif


dl.dropboxusercontent.com/u/20815047/LLOYH%26S.gif
The administrator has disabled public write access.
The following user(s) said Thank You: remo, Shotry, redchilly, Amo

H&S formations 13 May 2013 10:23 #18

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
screencast.com/t/nruARJ1vJJ

Apologies, this is the correct chart.
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.

H&S formations 13 May 2013 10:22 #19

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
screencast.com/t/d5lggm3Z4Fai

This one looks more convincing. Not seen the news that started this drop, but could it be off to the 1300s? (Stanchart)
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.

H&S formations 13 May 2013 10:15 #20

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
AMC Amur minerals
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.

H&S formations 13 May 2013 10:11 #21

  • Jackozy
  • Jackozy's Avatar
  • OFFLINE
  • Senior Poster
  • Posts: 869
  • Thank you received: 2261
  • Karma: 47
Personally I think about H&S patterns in terms of waves. If we take your example of AMC:

AMCdaily13_05_13a.gif


dl.dropboxusercontent.com/u/20815047/AMCdaily13_05_13a.gif

we could view the apparent iHS as a wave 1, then the left shoulder at wave A of 2, head at 2 and right shoulder at subwave 2 of 3. It's essentially the same as an ascending triangle too.

H&S patterns would then be formed by wave 5 of 3 as the left shoulder, wave 4 back to the neckline (which was the wave 4 of 3 low), wave 5 as the head, and then an ABC (or just the A) to form the right shoulder.

Clearly, when viewed this way, the patterns would be at the bottoms and tops of ranges as remo says. However, because waves are fractal, you could also have smaller, less powerful, H&S' and iH&Ss during trends as the subwaves form. It's a bit hard to put into words so I'll see if I can find an example of what I'm talking about in a chart.
The administrator has disabled public write access.
The following user(s) said Thank You: remo, WaveSurfer, Shotry

H&S formations 13 May 2013 10:05 #22

  • remo
  • remo's Avatar
  • OFFLINE
  • Moderator
  • Posts: 2803
  • Thank you received: 5120
  • Karma: 111
Hi shotry
whats the ticker for that company????

Head and shoulder are meant to signal a possible top formation.
Thats what there known famously for. If you start to take it from any where then it loses its ability as a pattern as you would get them more regularly. Its a rare pattern, well not too rare.
Its not a head and shoulders if it appears in a middle or bottom of a trend.

hope that makes sense
Information Purposes Only, Do Your Own Research
remo
The administrator has disabled public write access.
The following user(s) said Thank You: Shotry

H&S formations 13 May 2013 09:35 #23

  • Shotry
  • Shotry's Avatar
  • OFFLINE
  • Junior Boarder
  • Posts: 255
  • Thank you received: 144
  • Karma: 8
Remo and or others, if a H&S pattern can only come at the top of a trend and iH&S at the bottom, I'm probably mis-interpreting a number of chart patterns.

How would you describe this pattern on AMC which I think we were previously discussing as a H&S (maybe I'm wrong). Also if it's not technically an iH&S, can targets still be derived from the pattern as shown?

Appreciate the input
All it takes for the triumph of evil, is the silence of 'good men'
The administrator has disabled public write access.
Moderators: remo

Time to create page: 0.329 seconds