Dow - Head and Shoulder inside Head and Shoulder
If we dissect the right shoulder of the bigger head and shoulder seen on the daily chart via hourly chart, we see a head and shoulder breakout!
It has been breached on Friday and the prices are now trading slightly above the neckline seen around 17,590.
One may be compelled to think the bearish break has failed since prices are back above neckline...however, note that a larger head and shoulder on daily also showed a bearish break on Friday. Hence, caution is advised.
Outlook
Failure to sustain above 17,590 followed by a break below 17,538.78 (23.6% of Feb low - Apr high) would add credence to a bearish break from a larger head and shoulder seen on Friday.
Thus, downside stands exposed in this case. Immediate support then is seen at around 17,150 levels.
The bearish view would take a backseat if prices see a daily close above 17,606 today.
It has been breached on Friday and the prices are now trading slightly above the neckline seen around 17,590.
One may be compelled to think the bearish break has failed since prices are back above neckline...however, note that a larger head and shoulder on daily also showed a bearish break on Friday. Hence, caution is advised.
Outlook
Failure to sustain above 17,590 followed by a break below 17,538.78 (23.6% of Feb low - Apr high) would add credence to a bearish break from a larger head and shoulder seen on Friday.
Thus, downside stands exposed in this case. Immediate support then is seen at around 17,150 levels.
The bearish view would take a backseat if prices see a daily close above 17,606 today.
