Technical Analysis and Stock Market Profits by Richard W. Schabacker

Author:Richard W. Schabacker [Richard W. Schabacker]
Language: eng
Format: epub
ISBN: xx
Publisher: Harriman House Ltd.

The Horn as a Continuation Formation

The Chrysler chart, Fig. VII.6 shows the price action of this stock during the first half of 1929. (It is interesting to note that Chrysler made its “high” for the bull market of the 20s at 140 in October, 1928 – a full year ahead of the general market averages). In the rapid downward movement of this stock during the period shown, a brief rally in mid-April was quickly halted and turned into a Horn which again pointed prices down.

We refer to the example of a Horn in the Chrysler chart as a continuation, and to that in the Certain-Teed chart as a reversal, because of the relation which the Horn pattern bears in each case to the preceding general movement. It is, of course, obvious that the Horn contains within itself a minor reversal; while the narrow, accelerating end of it forecasts a continuation of its own trend to a climax just as do the patterns with Drooping Bottoms or Accelerating Peaks previously studied.

Fig. VII.4

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