June 17, 2011. This chart shows
the SOX Semiconductor Index testing the neckline of a
bullish inverted Head-and-Shoulders
Bottom (Reversal) pattern.
Will this mark the bottom or the start of something worse?
The PHLX Semiconductor Sector (SOX) is a Philadelphia Stock Exchange
capitalization-weighted index composed of companies primarily involved
in the design, distribution, manufacture, and sale of semiconductors.
From "Head-and-Shoulders
Bottom (Reversal) pattern
The
"Inverted Head and Shoulder Pattern" marks a major trend
reversal. The pattern is made by three successive lows with the
center low the lowest and the outside "shoulder" lows higher and
ideally equal distrance from the neckline. The neckline is formed
by the hights between the shoulders. The necline is often
tested from above before the pattern takes off which gives
conservative traders a second chance to buy the breakout.
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