Commsec Daily Market Report

Genex Power Ltd forms bearish "Head and Shoulders Top" chart pattern
Jan 29, 2018

Recognia has detected a "Head and Shoulders Top" chart pattern formed on Genex Power Ltd (GNX:ASX). This bearish signal indicates that the stock price may fall from the close of 0.29 to the range of 0.16 - 0.18. The pattern formed over 67 days which is roughly the period of time in which the target price range may be achieved, according to standard principles of technical analysis.

Tells Me: The price seems to have reached the end of a period of "distribution" at the top of a major uptrend; the break down through support signals a reversal to a new downtrend. The Head and Shoulders Top is created by three successive rallies in the price following a significant uptrend. The highest high (head) is in the middle, flanked by two lower highs (shoulders) at roughly the same level. Volume is highest as the price makes the first two rallies, then diminishes through the right shoulder. Finally volume surges as the price closes below the neckline (drawn between the two lows) to confirm the reversal.