NIFTY CAN COME AROUND 2800 LEVELS AS PER H & S PATTERN
HOW H & S WORKS BY EDWARDS MAGEE BASSETTI 9TH EDITION OF T.A OF STOCK TRENDS
A. A strong rally, climaxing a more or less extensive advance, on which
trading volume becomes very heavy, followed by a Minor Recession
on which volume runs considerably less than it did during the days
of rise and at the Top. This is the “left shoulder.”
B. Another high-volume advance which reaches a higher level than the
top of the left shoulder, and then another reaction on less volume
which takes prices down to somewhere near the bottom level of the
preceding recession, somewhat lower perhaps or somewhat higher,
but, in any case, below the top of the left shoulder. This is the “Head.”
C. A third rally, but this time on decidedly less volume than accompanied
the formation of either the left shoulder or the head, which fails
to reach the height of the head before another decline sets in. This is
the “right shoulder.”
D. Finally, decline of prices in this third recession down through a line
(the “neckline”) drawn across the Bottoms of the reactions between
the left shoulder and head, and the head and right shoulder, respectively,
and a close below that line by an amount approximately equivalent
to 3% of the stock’s market price. This is the “confirmation” or
“breakout.”
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