Verified Tip Not Ready to Pop Yet (Here's Why)Applied Digital CorporationBATS:APLDtroydowvanzandtThose of you familiar with the YouTube channel know that the nice people at Verified Investing like to throw the little guy a bone every now and then. One of their recent tips was APLD. The host pointed out a well-formed head-and-shoulders formation. I'm sure a lot of people were all over this like white on rice (and now wondering what the hey), but it's not ripe yet. Here's why: If you're an institutional-grade Ichimoku chartist, you are doubtless familiar with the Open Space Rule. Ichimoku means at a glance, and I took one look at this one and saw that if the head-and-shoulders is going to pop at all, it will only do so once the yellow Chikou Span is clear of price. But Uncle Itchy, isn't this a classic Sanyaku Gyakuten (Three-Condition Reversal) set-up? Almost, grasshopper, almost. If you look at the Chikou Span's current position and count back 26 bars, you will run into historical price. This condition is known as entanglement. I have a blue arrow extending from the 29 DEC 25 low pivot to approximate what the Chikou needs to get away from. Once the Chikou is disentangled, the next condition to look for is the kairi (estrangement) from the blue Kijun-sen. A flat Kijun-sen is a powerful magnet. The further price gets from it, the more it will want to snap back to it. I have the head-and-shoulders delineated precisely as the Verified folks presented it. However, you can see that the right shoulder is still forming. For an ideal short off this pattern, you will want to see price get within 5% or less of the Kijun-sen before pulling the trigger. The baseline's mean-reversion magnetism at this point will be subdued enough for price to drop away more easily. By the time this happens, this may end up being a right-slanting head-and-shoulders (even juicier), and the measured move would be deeper. All we can do at this point is wait and see.