A while ago I mentioned the weakness of the financial sector owing to an evolving head and shoulders pattern.
This is now coming to pass with the likes of BAC, GS, JPM, MS and others nearing or breaking their neckline breakdown levels.
Typically with a head and shoulders pattern you can observe the breakdown happening in slow motion as the OVI will typically head south well in advance of the neckline breach, and in many cases the OVI will be way ahead of the game, just as it was with HP earlier this year.
That hasn’t been the case with the bank stocks this time, but that didn’t stop me from ending my bullish stance on them as their uptrends came to an end back in March.
In any case you must always “trade what you see” and avoid imposing your will on a stock.
Now, talking of excellent OVI combinations with chart setups, FB did exactly what we thought it would with its railroad track setup on 17-18 May. That’s a golden combination that I filter for every day, and I explain it in today’s video.
