Head & Shoulders by Alexander Sabodin
ARTICLE SYNOPSIS ...Head & Shoulders by Alexander Sabodin
Here's a look at a familiar reversal pattern, the head & shoulders pattern.
IN this installment of the price model series, we will look at a well-known trend reversal model, the head & shoulders pattern. In part 1 last issue, I explained that for a price model to form, a previous trend needs to exist. The condition for the formation of a head & shoulders pattern is an ascending movement on a price chart, when every rise and fall is higher than the previous one. In Figure 1, you can see that at a certain stage in its development, the trend has accelerated...