Category: Money Tips Date: 2007-01-31
1. Pattern analysis
Complex head and shoulders is a head-shoulder-style (head and shoulders head and shoulder top or bottom) of the deformation of the trend, its shape and head-shoulder style is very similar, but the shoulder, head, or both appear more than once, generally speaking, can be is divided into the following categories:
(1) a shoulders-type pattern: a header were the same size as the two left shoulder and right shoulder, left and right shoulders roughly balance. Are more the one pairs of the right shoulder, right shoulder in the formation of the first one, the stock is not immediately below the neckline, but making a come back, but the rebound was limited to the right shoulder below the high point of the final price trends continue along the original down.
(2) more than one shoulder-style patterns: head and shoulder type have a general tendency to symmetry, so when the two left shoulder can be formed, most likely will be the formation of a shoulder. In addition to volume, the graphics of the left and right half of the Department of the Ministry of almost entirely the same.
(3) long over the shoulder-type pattern: during the formation of the head, stock prices rebounded again and again, but recovered to the previous level before the same high-point drop down to form a clear two head, two shoulders can also be referred to as type trend. I must note: volume in the second heads often less than the first one.
2. Market implications
Complex head and shoulders pattern analysis of the meaning and the general pattern of the head and shoulder type, as when at the bottom appears, it means that a longer-term l City coming; if at the top appears that the market will be turned down.
In the formation of the early stages of complex head and shoulders due to volume may be irregular, so that pattern is difficult to identify, but it is easy to see that it is a little long, and head and shoulders fully consistent with the trend.
Many people overestimate the compound head and shoulder patterns expected to go up (or down) the power, in fact, the strength of composite head and shoulder pattern is often more common head and shoulder pattern is weak. In the medium-term trend has emerged, the complex head and shoulders pattern to complete its minimum increases (or decreases) will no longer continue, while the average increase in head and shoulder pattern (or down), often out than their measured range from the most Xiu big.
3. Points to Note
(1) composite head and shoulder pattern of at least l hat / cap worn down measuring method and the general pattern of the head and shoulder the same way as the measurements.
(2) The composite head and shoulder type of neckline is difficult to draw out, because each one of the lower part of the shoulder and head (combined head and shoulders bottom is the rebound in part), and will not all fall on the same line. Therefore, the two should be the most obvious short-term low (compound head and shoulders at the end of the short-term rebound in the high point), the connection into the neckline. In addition or to drop (or bounce) to its price level of the highest number of successive Shu neckline.
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