GAIL

HEAD AND SHOULDER FAILURE PATTERN:

The above daily chart of GAIL is a typical example of failure of Head and Shoulder pattern as evident from my markings on the chart since trades are happening above the neckline for almost about a month and now it is poised for a breakout as confirmed by other indicators.

When price trades above the neckline, it is a first sign of failure. The confirmation of failure occurs when the price trades above the second shoulder high. So one can go long above Rs.360 which is  confirmation of head and shoulder failure setup. Most pattern failures make strong moves in the opposite direction.  First Target is the height of head from neckline i.e., 360 + 60 = 420 and second target is 162% and third target is 200% of the height from second shoulder high.  So the stock can move upto 480 also in the medium term.