NeeteshJain
Education

Educational 08: Head N Shoulder & Elliott Waves Relationship

NSE:BANKNIFTY   NIFTY BANK
This is an interesting educational post which I observed last week while analysing charts that were showing Head n Shoulder Patterns. I thought of relating it to the Elliott Waves Theory and found out some similarities in their pattern formation. I have displayed both the pattern formation and indicated WHEN & HOW TREND CHANGES once such patterns are formed.

H&S is a major reversal pattern and it is similarly indicated in Elliott Waves while showing a complete wave cycle where impulsive and correctives waves are added.

Key Similarities:

1. Left Shoulder of H&S pattern is compared to Wave 3 of EW

2. Head of H&S is compared with Wave 5 of EW

3. Left Shoulder is compared as Wave B of corrective Elliott Waves

4. Target of H&S is indicated as a completion of Zig-Zag Correction in Elliott Waves Theory

This make easier to indicate patterns and provide extra confirmation with other technical patterns. This makes our convinction strong and also make us confident to take informed decisions in the markets.

I would appreciate your views on the above sharing,

Thanks for support,

Regards,

Neetesh Jain

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Comments

aparn.siddz aparn.siddz
Hope have done it right????
+2 Reply
NeeteshJain aparn.siddz
@aparn.siddz You have done good job, it is always good to start and take initiative. Thanks for taking up the challenge :) Regards
+1 Reply
NeeteshJain aparn.siddz
@aparn.siddz Well Done, It looks good. Now, it should retrace back to neckline at around 3460 and then shall rally down again. Remember, once the price action moves above "Right Shoulder" then the pattern becomes invalid, i.e 3600 levels in this one.
Reply
Fabclub NeeteshJain
without confirmation can we go with drag down as per head ?
+1 Reply
@Fabclub Confirmation brings stability to the trade. It covers major RISK as you get assured about your stoploss once the price action confirms at neckline.
Reply
ShanTrader NeeteshJain
Neeteshji, Other than in H&S, how do we identify a 'bullish' or 'bearish' move from support or resistance ? Thank you.
+1 Reply
ShanTrader ShanTrader
Sorry, I meant to ask 'bullish' or 'bearish' confirmation ?
Reply
NeeteshJain ShanTrader
@ShanTrader You can start with identifying Lows and Highs of the price action. If you find Higher Highs and Higher Lows then you're in an uptrend trend and vice -versa. Bullishness and Bearishness are generally decided by the dominance of buyers and sellers in the market and once you find the trend you get to know who is the dominance and then you use any support or resistance for taking call as per the trend.
Reply
ShanTrader NeeteshJain
Thank you. Have a good weekend.
Reply
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