Intel: Reversal Pattern Confirmed!

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  • A Major Reversal Head and Shoulders pattern completed on Intel             .
  • The price has taken the neckline for the pattern at 29.00-29.50 level.
  • The Measured move or Ideal text book target is the distance from the head to the neckline, projected from the breakout below the neckline. And that points to another 29% decline. However, I see an appropriate first target at the main long term rising trend line shown on chart. A more aggressive target near the long term major support around 19.30.
Perfect entry area is on a retest of the broken neckline around 29.00. The trickiest part of the setup is stop placing, for me, I always like the stop to be above the right shoulder. However, in this case it will be a wide stop and hence decrease the risk-reward. Alternatively, a weekly closing above 32.60 will be my stop. Another option is to exit on a breakout above the falling trend line that connects the head and the right shoulder(shown on chart)

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Is a good graphic, and a good opportunity to short, but the only problem that i see, is than the stock are above your exponential moving average 200-days, and is not recommended short a stock above this indicator.
But, good job! ;)
Nice, my trade finally played out...
+1 Reply
nice :)
I like the setup Technician, very nice simple analysis as always! =D
Great work as usual! Thank you very much!
really NICE setup! Trade 20? :D
Neckline with a downward slope may cause that instead of Head and Shoulder pattern we will have an ABC correction
Thanks for your comment. The two lows for both shoulders are very close , in my view i consider it a horizontal neckline instead of a downward sloping.
Dawid_CEO PRO Technician
Last week i have got a nearly identical situation on polish stock market, but firstly i always decide to take a chance on Head and Shoulder pattern
+2 Reply
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