If we had taken the head-and-shoulders top to trade, we would have luckily been stopped out at the breakeven point. The fact that the bulls could not overcome the shoulder level indicates weakness, and fortifies the power of a possible bearish
breakout of the formation. Now are again in a bullish
phase, which covered the latest gap, and which seems to be insistent to visit the shoulder level one more time. In the last analysis the entire formation could bee interpreted either as a complex head-and-shoulders or as a diamond, both could give a short signal before the neck base line break-away. Thus, if the bulls could make it and break the shoulder resistance, a long entry opportunity is there. On the other hand, if one or both of the green lines are broken, a short position would be inevitable for us. We may utilize here a leveled entry for the bearish
scenario. Quarter-sized entry when the shoulder level pushes the prices downwards; second quarter-sized entry when the aggressive green line breaks; third quarter-sized entry when the other green line breaks; and finally a fourth quarter-sized entry when the neckline breaks.