Potash Corp of Saskatchewan Inc forms bearish "Head and Shoulders Top" chart pattern

2008-08-04 16:00 PM ET

New York, NY.   A "Head and Shoulders Top" chart pattern formed on Potash Corp of Saskatchewan Inc (POT on NYSE). This bearish signal indicates that the stock price may fall from the close of 180.14 to the range of 123.00 - 135.00. The pattern formed over 87 days which is roughly the period of time in which the target price range may be achieved.

A Head and Shoulders Top is considered a bearish signal. It indicates a possible reversal of the current uptrend to a new downtrend. A perfect example of the pattern has three sharp high points, the middle one being the highest, created by three successive rallies in the price of the financial instrument. The Technical Event® occurs when the resistance marked by the neckline is "broken", thereby confirming the pattern.

This bearish pattern can be seen on the following chart.

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