In this lesson, we will learn how the reverse head and shoulders in the daily chart of DISCA help to point to higher prices in DISCA.
The reverse head and shoulders pattern is a bullish reversal pattern. When it appears, it often tell us that the stock does not want to go any lower. It is bottoming and about to start a new move up.
The chart above is the daily chart of DISCA.
Notice how the stock made a nice reverse head and shoulders pattern. The head is where the stock move below the left shoulder but it then move back up. The right shoulder appears right at where the left shoulder is.
Notice how a bottoming tail appeared at the right shoulder.
A bottoming tail is a bullish reversal candlestick pattern.
A bullish cross also appeared near the right shoulder. The bullish cross is where the daily 20 MA cross back above the 50 MA.
On the day of the breakout, DISCA gap above a daily downtrend line and the 200 day moving average.
You can take the height of the head and shoulders pattern and project it upwards from the breakout point to get a target.
DISCA's move was textbook like. On the day of the breakout it met its initial target.
Hope this short simple technical analysis lesson help you to understand a bit more about the reverse head and shoulders pattern.
Nov 26, 21 08:04 AM
A technical outlook of NVDA's stock price. Is the stock in an uptrend or downtrend, where is support and resistance?
Nov 26, 21 07:17 AM
Are the markets going to continue to move higher? Is it in an uptrend or downtrend and where are the support and resistance?
Nov 24, 21 05:47 AM
Here are a list of stocks that are at their 50 MA and 200 MA. The 50 day moving average and 200 day moving average can be a support area where stocks bounce off
Nov 24, 21 05:33 AM
Here are a list of stocks that have broke out or about to break out. Breakout stocks can often give us a good reward to risk ratio.
Nov 24, 21 05:25 AM
Apple is one of those stocks that we should look at almost every day. The reasons is because it is a component of the Dow Jones, the S&P 500 and the Nasdaq.