Head and Shoulders Top (Reversal) - ChartSchool - StockCharts

Head and Shoulders Top (Reversal) - ChartSchool - StockCharts

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18/2/2014 Head and Shoulders Top (Reversal) - ChartSchool - StockCharts.com 1/3 StockCharts.com - ChartSchool Learn more about Technical Analysis and Charting Terminology You are here: StockCharts.com » ChartSchool » Chart Analysis » Chart Patterns » Head and Shoulders Top (Reversal) Advertisement Head and Shoulders Top (Reversal) A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal. The pattern contains three successive peaks with the middle peak ( head ) being the highest and the two outside peaks ( shoulders ) being low and roughly equal. The reaction lows of each peak can be connected to form support , or a neckline . As its name implies, the Head and Shoulders reversal pattern is made up of a left shoulder, a head, a right shoulder, and a neckline. Other parts playing a role in the pattern are volume , the breakout, price target and support turned resistance . We will look at each part individually, and then put them together with some examples. 1. Prior Trend : It is important to establish the existence of a prior uptrend for this to be a reversal pattern. Without a prior uptrend to reverse, there cannot be a Head and Shoulders reversal pattern (or any reversal pattern for that matter). 2. Left Shoulder : While in an uptrend, the left shoulder forms a peak that marks the high point of the current trend. After making this peak, a decline ensues to complete the formation of the shoulder (1). The low of the decline usually remains above the trend line, keeping the uptrend intact.
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  • Spring '12
  • RamonBrunoTulibasJr.
  • Right-wing politics, Left-wing politics, left shoulder, Shoulders Top, Shoulders reversal pattern

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