Head and Shoulder Pattern indicates Gold fall 2600$ Short entry between 2650-2670
Profit Taking zones are 2630-2600-2575
Max risk 5% of equity with averaging strategy in zone of 2650-2670
Bearish Head and Shoulder Pattern indicates more deep fall in Gold towards $2630-$2600-$2575
My chart analysis on gold futures contract
Neck Line is retesting again and again which will be attraction for buyers but be cautious.
Head and Shoulders Top (Bearish Reversal)
This pattern occurs after an uptrend and signals that the price is likely to reverse and head downward. It consists of three main peaks:
Structure
Left Shoulder:
The price rises to a peak and then declines.
Head:
The price rises again to a higher peak (the "head") and then declines.
Right Shoulder:
The price rises to a lower peak, roughly equal to the Left Shoulder, and then falls back down.
Neckline:
The line connecting the lows between the shoulders and the head. It acts as support.
A break below the neckline confirms the pattern.
Steps to Identify
Uptrend before the formation.
Three peaks: Left Shoulder, Head, and Right Shoulder.
The neckline acts as the key support level.
When the price breaks the neckline downward, it signals a bearish reversal.
How Traders Use It
Once the neckline is broken, traders expect the price to fall further.
The expected drop is calculated as:
Distance from the Head to the Neckline = Expected move downward.
