It’s very early days yet but the 4 hour chart is starting to show promise as a head and shoulder reversal pattern.
Given the big picture shark pattern, that DV34 has been keeping us up to date with in his guest posts, this could be an interesting development
A standard approach to entry strategies with the head and shoulder is to sell on a break below the neckline. In this case a move under the neckline would also act as confirmation of a break below the established blue trend line.
Where the neck line is downward sloping as it is here, this standard entry approach results in a relatively late entry on the head and shoulder. However, seen in the context of the potential for retracement in the weekly chart discussed in DV’s post, there’s still plenty of scope for an attractive reward: risk opportunity.
A typical approach for moving average traders willing to risk a lower success rate in return for an earlier entry would be to sell on a close below the 20 period moving average (green line) as long as it remains below the 50 period average (pink line).