Market
Industrials (^DJI):
Transports (^DJT):
Utilities (^DJU):
Nasdaq (^IXIC):
S&P500 (^GSPC):
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As of 09/19/2017
22,371 39.45 0.2%
9,507 -7.56 -0.1%
737 -2.02 -0.3%
6,461 6.68 0.1%
2,507 2.78 0.1%
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YTD
13.2%
5.1%
11.7%
20.0%
12.0%
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 22,450 or 21,500 by 10/01/2017 9,750 or 9,200 by 10/01/2017
775 or 730 by 10/01/2017
6,650 or 6,200 by 10/01/2017
2,600 or 2,425 by 10/01/2017
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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information.
Blog Posting: March 19, 2008, Housing Head-and-Shoulders Bottom?
The chart shows an unconfirmed head-and-shoulders bottom in Beazer Homes. It becomes a true head-and-shoulders bottom when price closes above the neckline
(shown in blue).
None of the stocks that I will mention in a moment are confirmed, so buying them now is a risky endeavor. I show this as an example of the genre, so you can get ready for the future.
I like Beazer the best because the head-and-shoulders bottom forms at the bottom of a flat base. Once price pushes above the flat base, it stands a better chance of continuing the up move. Of
course the housing industry is not the best performing of the bunch -- it ranks 29 out of 48 -- but it used to be dead last (48). What I find unusual is the number of housing stocks that
are forming the same head-and-shoulders bottom pattern. Here they are.
- Beazer Homes (BZH) -- the one shown above
- Brookfield Homes (BHS) -- not a very pretty one
- ITB -- This is an exchange traded fund
- KB Home (KBH)
- Lennar (LEN). This has a wonderful shape and that may mean it is more likely to fail
- Toll Brothers (TOL)
- WCI Communities (WLI)
I mention the fine shape of the head-and-shoulders bottom in LEN. It has been my experience that the best looking patterns have a higher probability of failing, but this is not based on measured
results, just a feeling.
Aftermath
Price confirmed the head-and-shoulders bottom when it closed above the neckline, three days after my blog post. Then price threw back (AB),
climbed again (BC), and threw back again (CD).
The unsteady move would give a trader
or investor an upset stomach. While the swings may not look like much, they represent a 25% drop for the first swing (AB) and 20% for the most recent swing,
CD.
-- Thomas Bulkowski
See Also
- The quiz page has actual trades, available for download at a good price (free).
- Here are other actual trades.
- Coldwater Creek (CWTR), congestion breakout on entry, hit stop on exit, 83% in 7 weeks.
- CNO 2.0. Fibonacci retrace on entry, inverted dead-cat bounce on exit. I made 90% in 2 months.
- Encore Wire (WIRE), rounded bottom on entry, inverted dead-cat bounce on exit, +24% in 2 months.
- Hudson Highland Group (HHGP), head-and-shoulders on entry, hit stop on exit, +55% in 3 months.
- National Fuel Gas (NFG), ascending triangle on entry, hit target on exit, +23% in 3 months.
- Vivus, full retrace of gap on entry, sell on symmetrical triangle breakout and bad news, 37% in 7 months.
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Written by and copyright © 2005-2017 by Thomas N. Bulkowski. All rights reserved. Disclaimer: You alone are responsible for your investment decisions.
See Privacy/Disclaimer for more information.
Congressional Virus: The computer locks up, and the screen splits in half with the same message appearing on each side of the screen. The message says that the blame for the gridlock is caused by the other side.
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