After forming 'Head and shoulders' if the price or index crosses back and stay above the neckline, the pattern is a failed head and shoulder. The following charts from Bursa Malaysia are heading in such a direction.
KLCI gained 17.61 points today to close the day at 1097, which is higher than its previous height of 1091 in June. With this latest development, the two most likely (at this moment) wave counts for KLCI are as shown below.
For possibility 1, I still maintain the likelihood that the index is forming major wave (IV), it can be a running A-B-C as shown with point B higher than point (III) and point C higher than point A or an expanding A-B-C where point C goes lower than point A.
For possibility 2, the index remains at major wave (III) with waves 1 and 2 completed and wave 3 being formed. Under this scenario, the current sub-wave iii of wave 3 of major wave (III) has to be very dynamic with big magnitude and high volume. In the absent of these characteristics in the next few days, then it is more likely to be a running A-B-C.
After forming 'Head and shoulders' if the price or index crosses back and stay above the neckline, the pattern is a failed head and shoulder. The following charts from Bursa Malaysia are heading in such a direction.
KLCI gained 17.61 points today to close the day at 1097, which is higher than its previous height of 1091 in June. With this latest development, the two most likely (at this moment) wave counts for KLCI are as shown below.
For possibility 1, I still maintain the likelihood that the index is forming major wave (IV), it can be a running A-B-C as shown with point B higher than point (III) and point C higher than point A or an expanding A-B-C where point C goes lower than point A.
For possibility 2, the index remains at major wave (III) with waves 1 and 2 completed and wave 3 being formed. Under this scenario, the current sub-wave iii of wave 3 of major wave (III) has to be very dynamic with big magnitude and high volume. In the absent of these characteristics in the next few days, then it is more likely to be a running A-B-C.
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