FTSE - Inverted Head and Shoulders

[Nelsy-Boy]

Is the FTSE showing an inverted h&s pattern on the weekly. If it is and it's broken the neck line of that, what is the likely target?

[Caseynotes]

@Nelsy-Boy,  the target is the same as for double tops etc, a measured move meaning an equidistant move (in the opposite direction) to that of the neckline to the head.

[Nelsy-Boy]

Thanks @Caseynotes. Can you please advise if the line I have drawn is the neckline.

[Caseynotes]

 

45 minutes ago, Nelsy-Boy said:

Thanks @Caseynotes. Can you please advise if the line I have drawn is the neckline.

@Nelsy-Boy,  two schools of thought on that one. Some say the neckline should be drawn horizontal while others say you should use the use the 2 points of the base of the neck and if they are at an angle so be it. Take your pick.

An important point though is that though technical analysis might sound technical it's really nothing more than a guessing game. Price does not subscribe to TA. Price will do it's own thing no matter what lines are drawn on the chart which is why technicians don't make good traders. TA is for basic reference only.

[Nelsy-Boy]

@Caseynotes thanks for your insight again and appreciate your comments on price action along with @TrendFollower. I have read a lot about these patterns becoming self fulfilling, in that so many traders recognise them and they all, on this occasion, buy the index. I have certainly tried to cut down on indicators and lines on the chart because I have put myself off from dealing due to conflicting signals. I mentioned divergence in a previous thread that you helped me with. I’ll keep learning and will put questions on the community as and when they come up.

[Caseynotes]

@Nelsy-Boy & @TrendFollower,  you are right Nelsy that patterns can be weighted above indicators and that there is a degree of self fulfilling prophesy to them and that too many indicators will lead to analysis paralysis.

If you have seen any of my charts you will note I tend to stick to simple support and resistance, this is because it is one of the few indicators that is real and observable on the charts that signal boundaries. They are potential battle lines and I like to watch battles from the sidelines and be ready to get up and follow the winner as they march towards the next battle line. Keeping it simple.