A technical analyst observes a head and shoulders pattern in a stock she has been following. She notes the following information:
| Head price | $83.50 |
| Shoulder price | $72.00 |
| Neckline price | $65.75 |
Based on this information, her estimate of the price target is closest to:
A is correct.
Price target = Neckline - (Head - Neckline).
In this example, PT = 65.75 - (83.50 - 65.75)= 65.75-17.75 = 48.00.