Join Dstockmarket's Community - Daily Market Analysis, Individual Stock Analysis.
In this chart lesson we will learn how the 60 min ascending triangle and reverse head and shoulders that appear in the S&P 500 hinted of a reversal and new high.
Let us start off with the 60 min chart of the S&P 500 futures. The S&P had a correction but it eventually formed a 60 min ascending triangle.
The 60 min ascending triangle can also be used as a reversal pattern.
Note that the SPX also broke above a 60 min downtrend line. This told us that it wanted to change trend from bearish to bullish in the 60 min chart.
A large green candle formed as the SPX broke out of the ascending triangle.
The SPX then formed a bullish cross where the 60 min 20 MA goes back above the 60 min 50 MA.
After some time, the SPX also formed a 60 min reverse head and shoulders. I have drawn it in blue colour.
The reverse head and shoulders can actually be used to set a target. If we take the height of the pattern from the neck and project it upwards, we can find a possible target.
As you can see, the SPX has already met the reverse head and shoulders target. The SPX also made a new high.
Sometimes its good to have a look at the daily chart as well.
As you can see, the SPX is in a daily uptrend. The SPX dropped to the daily 20 MA and this is where the 60 min ascending triangle appeared.
The 20 MA can usually be a support area or reversal area when a stock or index is in an uptrend.
Indices that are in an uptrend tend to go higher and dips and breakouts can be bought.
The combination of two patterns in the 60 min chart can often be very powerful. In this case, the 60 min ascending triangle hinted of a reversal and the 60 min head and shoulders helped to set a possible target.
Nov 30, 20 09:44 AM
The S&P 500 has broken out into new highs and I believe that it has establish a new support area.
Nov 23, 20 09:05 AM
After breaking out of a downtrend line, the S&P 500 still looks bullish for the near term.
Nov 17, 20 05:26 AM
After the news of Tesla being added to the S&P 500, it is gapping up pre-market.
Nov 09, 20 06:56 AM
After the elections, the S&P 500 is now breaking out of a triangle pattern.
Oct 23, 20 08:22 AM
The US stock market seems to point to a Republican victory. It is still in an uptrend and therefore we should continue to remain bullish.