The following is a form analysis technique shared with everyone. How are the head and shoulders bottom and head and shoulders top patterns formed?
The stock price fluctuates for a long time. From the K-line graph, whether it is a weekly K-line or a daily K-line, during the rise and fall process, it will stay in a certain price range for a period of time, ranging from a few to several. Ten K lines gather in a certain price area. The size of this K-line intensive area is determined according to the changes in the strength of bulls and bears. For example, the stock price rises from 10 yuan and stays between 13 and 14 yuan, forming a K-line intensive area. If the bulls are strong and stay for a few days, the stock price will rise again and break through 14 yuan, and a quick decision will be taken. Sometimes the resistance of the bears is strong and it is difficult for the bulls to conquer in the short term. They can only consume the strength of the bears first and then attack with all their strength. Observing the K-line intensive area, several standard legends can be vaguely observed. relatively. The stock price fell from 14 yuan and stayed between 10 and 11 yuan, forming a dense area. Then, depending on the strength of the short sellers, the length of the circling time will be determined, and whether it will fall below 10 yuan. Observing the K-line intensive area, you can also find different standards. Legend, the following introduces the head and shoulders patterns that often appear in the intensive area of ????K-line graphics.
In the K-line intensive area, there will be three peaks or three bottom points, but the second peak or bottom point is higher or lower than the other two peaks or bottom points. From a graphic point of view, it looks like one top and two shoulders or one bottom and two shoulders, and it can be divided into head and shoulders top (as shown in Figure 7-1) and head and shoulders bottom (as shown in Figure 7-2).
More than three tops or bottoms may appear in the K-line intensive area. If one or two heads, two left shoulders and two right shoulders appear on the graph, it is called a compound head and shoulders pattern. There are also compound head and shoulders tops (Figures 7-3 and 7-4) and compound head and shoulders bottoms (Figures 7-5 and 7-6).