On The Nested Head And Shoulders In The SOX
Dragonfly Capital | Sep 30, 2014 08:02AM ET
The Philadelphia Semiconductor Index or SOX had a long run higher from November 2012 until it stalled earlier this summer. So what happened? Well the SOX has stalled right at the Price Objective of one of two nested Inverse Head and Shoulders patterns:
The chart above shows both Inverse Head and Shoulders patterns. The smaller one in blue carries a price objective to at least 660, right where it is having trouble. This could lead to more consolidation and maybe even a short term pullback.
Despite the Bollinger® bands continuing to run higher, you can see the momentum indicator RSI is a wee bit overbought. But don’t forget the bigger Inverse Head and Shoulders pattern marked in purple. This one carries a Price Objective of at least 790, well above the current level.
Disclosure: The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.