Below is a slider quiz to test your ability to identify horn bottoms and trade them. Captions appear below the pictures in red for guidance, so be sure to scroll down far enough to read them.
1 / 7
All of the charts in this quiz are on the weekly scale, just in case I forget to tell you. Anyway, a horn bottom appears at AB. It has two downward price spikes with a price
bar in between. That's one price bar in between. This pattern confirms as a horn when price breaks out upward at C. Price closes above the top of the horn. Horns with volume heavier
on the left spike than the right tend to outperform. In this example, price about doubled.
2 / 7
Find as many horn bottoms as you can along with as many head-and-shoulders tops as you can. For help, click here.
3 / 7
I see two horn bottoms (H) and two head-and-shoulders tops. Circled in green is not a horn bottom. Scratch that.
It probably is a horn bottom because price first closes above the top of the pattern and not below it (but it's a near miss, which is why I didn't catch it until now).
4 / 7
Try again. Yes, the horns are obvious, so look for a rising wedge, too.
5 / 7
The Hs represent the horns and the rising wedge is inside the two sloping red trendlines. Circled is another horn, which is hidden like the one two slides ago.
6 / 7
The horn is at H. Price breaks out upward at A in a strong push higher. I won't ask how far price may rise. Instead, will you take this bullish trade or not?
7 / 7
"Not" is the correct answer. It's been my experience then when price forms a mountain range of horizontal price movement like the red line shows, it's bad news.
The horn appears at H and price stalls at A, drops, and down the stock goes during the bear market.
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