Head and Shoulders Chart Pattern

The head and shoulders pattern is a chart formation that appears as a baseline with three peaks: the outside two are close in height and the middle one which is highest.

Head and shoulders pattern technical analysis

In technical analysis, this pattern is used to predict a trend reversal from bullish to bearish.

• When the head and shoulders occurs, the pattern starts with the price rising and then pulling back, forming the left shoulder.
• After the price rallies for a second time, it creates a higher peak, which is known as the the head.
• Afterwards, the price pulls back again, and then rallies into a lower peak, forming the right shoulder.

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