IWM Must Work Its Way Across the Navy Blue Rising Megaphone Before it can Correct
IWM is back at the top of the big red megaphone it began forming at the end of 2013. It needs to retrace to at least the red megaphone VWAP.
In order to correct to at least the red megaphone VWAP, it must work its way across the navy blue rising megaphone while forming a head and shoulders or megaphone top.
IWM has Formed a H&S Top with a Megaphone Right Shoulder
Right now there’s a flat-bottomed megaphone top on the chart, which is also a head and shoulders top with a megaphone right shoulder. But IWM needs to complete a conventional head and shoulders with a right shoulder that’s a bounce off the navy blue rising megaphone. Otherwise it complete a megaphone top after breaking out the bottom of the navy blue megaphone.
This process will eat up more time and IWM could cross the red megaphone top while it’s doing it.
IWM may be Stuck in the Red Megaphone for Years to Come
The big red megaphone is part of the topping process of a series of longer-term rising megaphones inside rising megaphones. Sooner or later, IWM must retrace to the bottom of these rising megaphones. There’s a great chance it will do that without ever leaving the red megaphone.