The Handbook of Technical Analysis + Test Bank_ The Practitioner\'s Comprehensive Guide to Technical Analysis ( PDFDrive )

Cycle Analysis

In similar fashion, a head and shoulders formation is the result of adding the

amplitudes of a larger and smaller wave. See Figure 20.10.

Figure 20.11 shows a head and shoulders formation as a sum of both a longer‐

and shorter‐term wave cycle.

figurE  20.10 Principle of Summation in Action in the Creation of a Double Top

Formation.

figurE  20.11 Principle of Summation in Action in the Creation of a Head and

Shoulders Formation.