Head and Shoulders Top? S&P 500 to Consolidate and find Lower Trading Range

S&P 500 Market Top?


The U.S Stock Market as represented by the S&P 500 has made a good run, from S&P 500 level of 666 to 1219.80 for a strong rally.

However, based on the Chart Annotation above, the S&P 500 may have hit a Head and Shoulders Top, a Technical Pattern (analyzing patterns based on stock chart patterns) that suggests that a Top has been made and a downtrend could ensue.

Consolidation Pattern then Breakdown or Breakout?



Longer Term, the S&P 500 market may re-test the Previous low of 666, or a more likely situation, the S&P 500 market will start to consolidate into a sideways Symmetrical Triangle Pattern as shown in the chart above.

In the Symmetrical Triangle Pattern, the Stock or Market trades in the triangle, until it reaches closer to the end of the triangle, and then the market may break upwards, or downwards.

The Market does look like it may be going lower and find a lower trading range for now.

S&P 500 Stock Chart Today

HMSY 52 Week High; ATVI - DJ Hero Game; S&P 500 - Breakout Near

1. HMSY (HMS Holdings) hit 52 week high
   
   HMS Holdings (HMSY), a small cap company that takes advantage of waste in Government Health care Benefits, has just hit a 52 week high gaining 3.5% on Wednesday, February 4 to $33.13. This stock is technically strong and has good fundamentals as well.
   
   
2. ATVI (Activision-Blizzard) to release DJ Hero By End of Year
   
   Activision-Blizzard, Makers of the popular Guitar Hero, Call of Duty and World of Warcraft, announced that the game "DJ Hero" will be released before the end of the year, "and will include turntable-based controllers which gamers can use to spin and mix songs."
   
   
3. S&P 500 is still in converging triangle pattern; Breakout is near
   
   The S&P 500 is still in a converging triangle pattern. The end of the triangle appears to be before the end of March. Typically, breakouts (either up or down) will occur before the end of the triangle.
   
   Many speculate that these triangles are more likely downside patterns than upside patterns.
   
   This blog examined this triangle.
   
   The Daily Markets Blog agrees with The Tech Farm Blog's assessment.