lauralea

Inverse Head and Shoulders

Long
NYSE:GD   General Dynamics Corporation
So earnings are estimated to be in AM..

We all know it is risky to trade before earnings ..

Head is at 129.17
LS 137.85
RS 144.50 ( RS is higher than LS)
Neckline is 156.15 ..
156.15 - 129.17 =

It also looks like a rectangle is trying to form..



There is also a Gartley pattern prior to the Inverse H&S
According to Gartley , he was finally able to solve two of the biggest problems of traders: what and when to buy. Gartley Patterns are very common in the market. Now there are a lot of "mutations" of this pattern with animal names, like the Bat, Crab , Shark , Butterfly etc. All harmonic patterns are based on ABCD patterns. These come in a bearish variety as well and the bearish patterns look like a W. The bullish ones look like a M. Mr Oglesby discovered the Cypher pattern and it is not named after an animal. The ABCD pattern and the Cypher pattern are not named after animals.

These patterns have a lot of rules involving FIB levels and the fib levels are what differentiates each pattern. You can start trying to figure out which one it is at the pullback at the AB leg, but some have the same fib level for B..so you have to wait as a rule. If C goes above A, there is a good chance you have a cypher if fib rules are met. If D pulls down below A, there is a chance you have a Butterfly (o: If you wish to go long, and have a bullish harmonic pattern , you want to get in at D after a retest of D or a bullish close over D. If you got really good at getting in and getting out, you could also go long on BC leg and go short on the down legs...so you could really make money on every leg.

The “perfect” Gartley pattern has the following characteristics: (Not all patterns are perfect and this we know so some give or take a smidfeon on the fib rules)

Move AB should be the . 618 retracement of move XA.
Move BC should be either .382 or . 886 retracement of move AB.
If the retracement of move BC is .382 of move AB, then CD should be 1.272 of move BC . Consquently, if move BC is .886 of move AB, then CD should extend 1.618 of move BC .
Move CD should be . 786 retracement of move XA

Not a recommendation
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