Straits Times Index - Complex Head & Shoulder
When I was trying to trace the left shoulder in the previous chart, I was pretty confused by the two small peaks formed on May 8 & 20. What I did was I negate the May 20 minor peak. On July 9, STI staged a rebound after violated the neckline. I have initially thought it was a throw back but the rebound was so strong that prices went back to neckline. This leads me to think that we are in for a complex Head & Shoulder pattern instead of a simple Head & Shoulder. That mean, there is 2 left shoulders and 2 right shoulders. Regardless of simple or complex, the forecasting implication remains the same - target 1985. Since the formation spins over early May through July ( 3 months ) so the target is likely to spin over the same length of time from the point where the neckline is penetrated decisively.
PS: Actually, the target may not be 1,985. The neckline is titling up. Depending on when the neckline is broken, we shall subtract 270 points from the point of penetration so the target may be 2,000 or 2,050.
PS: Actually, the target may not be 1,985. The neckline is titling up. Depending on when the neckline is broken, we shall subtract 270 points from the point of penetration so the target may be 2,000 or 2,050.
Labels: Market Direction
posted by Market Wizards @ July 12, 2009
Comments: 0
