I agree that it could be forming a H&S top, but the problem with H&S patterns near highs is that 9/10 times, it is not a topping pattern, but instead a consolidation pattern. The problem is that H&S patterns often turn into triangle patterns. So how does one decipher whether it is a H&S top or a triangle? Volume is the only way. See what volume does on the right shoulder and then we can have a better idea about whether this is a topping pattern. 2/21/14
Price breaking the neckline would confirm the H&S pattern. I always look for the left shoulder to be higher or equal to the left shoulder so this one still has some time to develop. Should be fun seems how this must put in a compound right shoulder to meet the left side. Few more months to go. If price travels above 38 the H&S would be invalidated and I would not trade it. 2/21/14
My problem with H&S patterns is that a lot of them don't have equivalent shoulders. I also don't like waiting for a neckline breakdown to go short. Market makers and professionals know how to screw retail traders/investors by making these patterns break and then immediately fail. 2/21/14
You should never trade a head shoulder then :) Kidding. Stops are a must but check some of these head shoulders I have traded this year on the daily charts you will find TRLA TSO PETM have hit targets and currently REV, T, PM, and SSI have triggered and are moving nicely down. And there are many waiting to trigger over the next few months. 2/21/14
Dink
