Toronto-Dominion Bank (TD - Get Report) is showing traders an almost identical pattern to the one in JPMorgan right now. Like JPM, TD Bank broke its uptrend back in April and corrected hard as early sellers took their gains and weak hands got forced out of the stock. Now, with sellers getting exhausted, a textbook inverse head and shoulders pattern is forming in shares.
Also like JPM, the inverse head and shoulders in shares of TD is a short-term setup, but it could very well lead to a more meaningful move higher. The neckline level to watch for the TD trade is $78 -- that's the price that connects the tops of the setup. A breakout above $78 means buy TD.
Lest you think that this pattern is less useful since it's so well known, think again: an academic study conducted by the
Federal Reserve Board of New York found that the results of 10,000 computer-simulated head-and-shoulders trades resulted in "profits