H&S formations

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)

AMC Amur minerals

Personally I think about H&S patterns in terms of waves. If we take your example of AMC:



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.

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

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