For those of you not keen on becoming head and shoulder aficionados I do apologise but on my travels through the chart landscape today it seems to be all that I’m seeing. Everyone seems to love tech companies at the moment and it’s not hard to see why. Naturally Apple makes the biggest news but you can see plenty of other examples as to how well it has been doing – this previous post on Amazon showed how readily the momentum built with the price easily hitting the target. The one that I am looking at here is Cisco Systems (CSCO.US):
On this chart we have had something of a false break from the setup so an even greater degree of care needs to be taken with this setup. What will be really interesting will be whether we can get some gapping to the downside occurring which will give us an island reversal – this will add some bearish weight to the argument. You can see the previous CSCO setup by clicking here – this was a successful setup on a symmetrical triangle.
Like in today’s previous H&S post I am looking at a slightly different profit target measure and I think the area where the gap will be filled in is probably a good point to aim for with the stop placed above the right shoulder. Again I have posted this chart on the Message Board so you can grab it from there if you like.