Is this a H & S ?

Chart Forum » Chart Patterns » Is this a H & S ?

«« Previous Next »»

Thread Start New Thread
Last Poster Posts Pages Last Post

Author

Message

hershy

Member

Post Number: 1587
Registered: 10-2002

Rating: N/A
Votes: 0


Wednesday, October 18, 2006 - 10:08 pm:

Technically speaking, this is an inverted Head and Shoulder pattern, right ?

I don't have a plan so nothing can go wrong !!!

http://members.optusnet.com.au/~hershy/

danielc

Member

Post Number: 104
Registered: 09-2003

Rating: N/A
Votes: 0


Thursday, October 19, 2006 - 06:08 am:

Suppose you could call it that.Also some sort of round btm with vol up its tail and a cluster of green candles,obv good, blew off into a low ,went up consolidation patten on day week mth now looks like it is setting its self up to run,worth a punt imo.Weekly eqi vol shows a very clear base patten.

coyotte

Member

Post Number: 502
Registered: 12-2002

Rating: N/A
Votes: 0


Saturday, March 15, 2008 - 10:08 pm:

a bit of advice requested from other pattern traders :

Which is the correct Base Line ?

1: the diagonal line at the $39 low or
2: the horizontal line at the $31 low

Is the counter trend off the $39 low strong enough to claim as a Base line , as it did correspond with the Left Shoulder and later resistance during Sept 07 .

The point being is : if the diagonal is the Base Line then the H&S is confirmed .
But if the Horizontal is the Base Line then the H&S is as yet unconfirmed

Any comments appreciated .

(Message edited by coyotte on March 15, 2008)

The "Sea of Uncertainty" is defeated by the nimble vessel "Probability", not the unwieldy vessel "Prediction".

paddy

Member

Post Number: 9
Registered: 03-2008

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 12:30 am:

This chart was discussed on another website [ don't remember ]/ If I was using the "pattern" I would use 31 as the base
. However somewhere, I recall someone stating " don't trust a H&S if the right shoulder is higher than the left".

Given the stock and the prices of metals, demand for iron ore , aluminum, copper I really can't see a big downside for BHP. As long as China's demand stays in place then we can expect normal corrections but upward should be direction of stock price .

rdumas

Member

Post Number: 1232
Registered: 11-2006

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 08:21 am:

Hi Coyotte,

Colin has a very good description on the H&S pattern on this website. You will notice that volumes also have to be taken into consideration in the various parts of the pattern.

The other point that he raises is that if the base line actually slopes downwards then there is a greater potential for the pattern to succeed.

tryhay

Member

Post Number: 958
Registered: 09-2005

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 08:53 am:

Sounds like more than achademic interest in this one coyotte.

FWIW colin's guideline is here: http://www.incrediblecharts.com/technical/head_and_shoulders.htm

I suggest you read it a number of times noticing volume and other details... I know real life ain't like the text book pic but the neckline should have multiple touch points..

From a FA perspective BHP should already have rocketted to the moon and it just has not had the momentum to get above the LHS shoulder.

Don't get me wrong I'll be a buyer, but not at these prices..

bhp

There must be others who care to comment ~ I see H started the thread maybe some pearls there...

Happy trading DYOR

paddy

Member

Post Number: 11
Registered: 03-2008

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 09:57 am:

Tryhay : Your interpretation of pattern is different from Coyote . Your right shoulder is different set of points .

Using Coyote chart with sloping neckline I get a difference of 48±[H] - 39± [NL] = 9 . Using pierce point of approximately 41 on the right shoulder one gets a downside target of 32 . That is if pattern is a valid H&S and one has the 'right" right shoulder .

coyotte

Member

Post Number: 504
Registered: 12-2002

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 11:14 am:

Tryhay

certainly is more than academic -- think the whole XMJ depends on getting this right -- along with i am currently SHORT BHP.

From Edwards & Magee -- about 3 pages of fine print on the Volume pattern alone for this setup , one point is the Breaking of the Neckline must be on high Vol.

Another major point from (E&M ) -- the A,B,C are just labels and nothing to do with EW .

The D low must be lower than the A high -- well was , but just barely : D = $39.71 , A= $39.79

E&M then go on about H&S Variations (Vol patterns are constant) and both of these patterns may be invalid if " D " is not regarded as a true Penetration of " A " .

Edit: from E&M -- the Low before the Right Shoulder MUST penetrate into the Left Shoulder

(Message edited by coyotte on March 16, 2008)

The "Sea of Uncertainty" is defeated by the nimble vessel "Probability", not the unwieldy vessel "Prediction".

resillent1

Member

Post Number: 389
Registered: 10-2006

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 11:24 am:

Most interpretations depend on time frames.

For the displayed time frame $31 is the base. If that is breached than a reasonable head & shoulder is in place and the channel on the chart is no longer relevant.

The channel was breached in January but to date those prices look like they have been rejected.

For the displayed time frame, concern arises if price fall below the channel and $31 is the stop.

Room for both the shorter term down and longer term up trend to co-exist is running out. Which will win and what happens next? I don’t know so prediction is of no use leaving only reaction, specific to the time frame.

coyotte

Member

Post Number: 505
Registered: 12-2002

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 11:55 am:

From E&M Vol 7 pages 72/75 in Ref: to IC version of H&S

Quotes : The neckline may slope up or down . The only qualification on a Up sloping neckline is the Bottom of the recession between the Head and the Right Shoulder must form appreciably below the general level as the Top of the left shoulder . It is sometimes said that a Down sloping Neckline indicates an a unusually weak situation. (E&M then go on to dispute this about the Down Sloping Neckline )

Targets:

E&M same as IC

Guppy as I have drawn -- Head to Mid-Point of Base line .

just seems to get more complicated as it goes on !

The "Sea of Uncertainty" is defeated by the nimble vessel "Probability", not the unwieldy vessel "Prediction".

paddy

Member

Post Number: 12
Registered: 03-2008

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 01:26 pm:

Have to admit I am a bit confused with the H & S pattern . Correct me if I am wrong . Is the neckline not drawn through the bottoms of the troughs separating the the shoulders and the head ? I would have shorted at a break below 41 . Cleared position on reversal . In theory one would have shorted again below 40 and either out at 36± and again shorted at below 40 with a stop loss at 39 1/2. What say yee? Have I been out in the desert sun too long?

coyotte

Member

Post Number: 506
Registered: 12-2002

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 08:14 pm:

H&S according to Guppy :

hs-guppy.pdf (69.0 k)

The "Sea of Uncertainty" is defeated by the nimble vessel "Probability", not the unwieldy vessel "Prediction".

paddy

Member

Post Number: 13
Registered: 03-2008

Rating: N/A
Votes: 0


Sunday, March 16, 2008 - 10:49 pm:

Here is an interpretation of BHP[ADR] chart . Found this on CNBC . Charting Asia | BHP (ADR) Weekly Chart Link is :

http://www.cnbc.com/id/23456772/site/14081545/http://media.cnbc.com/i/CNBC/Secti ons/News_And_Analysis/_Asia/Columns/ChartingAsia/B_Guppy%20BHP%20march%204.jpg

So still left with question : " Who has the "right" right shoulder?

tryhay

Member

Post Number: 960
Registered: 09-2005

Rating: N/A
Votes: 0