A Neckline Doesn’t Make It A Head And Shoulders
Dragonfly Capital | Oct 04, 2012 05:42AM ET
Just because you can draw a neckline doesn’t mean it is a Head and Shoulders Pattern. Many are asking if this chart below of iShares Barclays 20+ Year Treasury Bond Fund (TLT) is a Head and Shoulders top. There is a neckline and a right and left shoulder with a head, but there are some things about this that are problematic.
First the neckline has a pretty steep slope to it. We can get over that if it was the only issue. But the two Shoulders are also very different in size with the left being about 5 and the right at 8 is much closer to the size of the head at 10. Perhaps if it falls back to the neckline again it could be a two headed Head and Shoulders Pattern.
iShares Barclays 20+ Year Treasury Bond Fund (TLT)Original post
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