For today's chart we've chosen to take a look at
Charlotte Russe Holding Inc (NASDAQ:
CHIC) because it is testing an interesting level of
resistance. As you can see from the chart below, the bears have recently pushed the price of this stock below the neckline of a
head and shoulders pattern (shown by the yellow arrow). This technical chart pattern is used by traders to signal the reversal in an uptrend and the breakdown is suggesting we could see a sharp move lower.
The recent bounce off the
neckline, also known as a throwback (illustrated by the white arrow), is a sign used by traders to confirm that the bears are in control. This type of failed move above a new level of resistance is a common occurrence and is often used to validate a technical chart pattern.
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