In previous postings, we discussed the elements of a good signal. This week we see such a combination unfold before us in the EURYEN. Lets recall.
A good signal has the following:
1. Resistance level provides a ‘hard’ place for price to reverse
2. A chart pattern hints at reversal
3. At the critical point, a candlestick pattern can be seen
4. All of the above come together in a confluence ultimately confirmed with trend line break
Let’s good at the EURYEN chart.
Firstly, the daily chart provides the ‘hard’ place to start looking for a reversal.
Daily resistance hints at reversal
At the 4-hour chart, we can other elements fall in place.
- The violation of the first trend line shows the end of the predominant trend
- A price pullback after the first trend line break hints now a head and shoulder pattern
- A second (shorter) trend line can be drawn to indicate the trend of the pull back
- A big evening doji look-alike bar that violates the second trend line shows the breakdown of the pullback
- Finally the violation of the neckline confirms the head and shoulder formation
Head and shoulder in EURYEN at resistance
Some previous postings
