ALK Double H&S Pattern
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After forming a perfect Head & Shoulders pattern, a larger Head & Shoulders is taking shape.
The already completed H&S pattern is pretty much a picture perfect formation.
- Left shoulder shows strong volume on the upside and lower volume on down days
- The head shows increased volume on positive days at the beginning, but volume fades as ALK makes higher highs. THIS IS A TELL-TALE SIGN WE REACHED A TOP
- As we moved lower, ALK had a false breakout on low volume as the stock made its way back above the neckline the same day.
- As the right shoulder formed, volume was low on up days and increasing on down days
- The final breakout confirmed on high volume. Another big indicator is the strong red candlestick that closed at the lows of the day (shaved bottom).
After falling almost $6 from the first H&S neckline, the stock hit a trend line that has now been hit 4 times. The stock also hit what could be a neckline to another head & shoulders. If you look at the chart and the volume, almost the same comments can be applied to the larger (blue curves) H&S pattern. Considering the stock looks to be quite oversold, and given the 2 aforementioned resistance points, I believe the stock will retrace along its trend line up to the first neckline at $92. This is typical after a H&S is completed (red curves) as the bulls try to salvage something after being stopped out.
Look for lower than average volume going up and high volume on down days. If It does retrace to the neckline, there will be very little room until a down day will break that trend line (especially with earnings looming on 4/26), in which case the stock will go much much lower.
The already completed H&S pattern is pretty much a picture perfect formation.
- Left shoulder shows strong volume on the upside and lower volume on down days
- The head shows increased volume on positive days at the beginning, but volume fades as ALK makes higher highs. THIS IS A TELL-TALE SIGN WE REACHED A TOP
- As we moved lower, ALK had a false breakout on low volume as the stock made its way back above the neckline the same day.
- As the right shoulder formed, volume was low on up days and increasing on down days
- The final breakout confirmed on high volume. Another big indicator is the strong red candlestick that closed at the lows of the day (shaved bottom).
After falling almost $6 from the first H&S neckline, the stock hit a trend line that has now been hit 4 times. The stock also hit what could be a neckline to another head & shoulders. If you look at the chart and the volume, almost the same comments can be applied to the larger (blue curves) H&S pattern. Considering the stock looks to be quite oversold, and given the 2 aforementioned resistance points, I believe the stock will retrace along its trend line up to the first neckline at $92. This is typical after a H&S is completed (red curves) as the bulls try to salvage something after being stopped out.
Look for lower than average volume going up and high volume on down days. If It does retrace to the neckline, there will be very little room until a down day will break that trend line (especially with earnings looming on 4/26), in which case the stock will go much much lower.
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Dead cat bounce beginningCommentaire
Commentaire
Ah when something goes right....
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