Saturday, July 3, 2010

Necklines

Chris Kimble at dshort.com has a remarkable chart for the Dow showing different head and shoulder patterns over the years. He writes:
Necklines? It's the topic of the week, along with the adjoining Head and Shoulders. So is it really that big of a deal? Does the pattern happen very often and have much of an impact?
I looked back over the past few years of the SP500 and highlighted a few of these patterns and what happens at the neckline.
Have a look at the chart above and then you be the judge as to whether Head and Shoulders are important and whether the neckline really is that big of a deal!
From my perspective, the neckline is very important, and the markets will play with this neckline for a little while longer.



The chart comes from the same chris kimble. It is a learning experience. Click on the chart and study it in full size.
My Notes: The neckline is at 1040 while the SP500 closed on Friday at 1023. We assume that the index ill oscillate around this zone 1040 - 1010 for a few ays. A close below 1010 will tell us that the neckline may not be holding.

1 comment:

Ashvin said...

sir,

do u use volume&market sentiment indicators like trin,a/d line etc.. in u r trading stratergy.

if no then why?
if yes which indicator and why?