Head and Shoulders Top

Head and Shoulders Top (Reversal)
A Head and Shoulders reversal pattern forms after an uptrend, and its completion marks a trend reversal.

Head and Shoulders Top
The bearish HEAD AND SHOULDERS pattern is often talked about, but seldom seen.

Head and shoulders top
Implication
A head and shoulders top is considered a bearish signal. This indicates a possible reversal of the current uptrend downtrend new.

The Head and Shoulders Top is another chart that may indicate a stock has made a top. Usually a Head and Shoulders pattern will have a Head and two Shoulders with a Neckline connecting the bottom of the two Shoulders.

Head and Shoulders Top
Head and Shoulders Top is formed when a higher high in an uptrend is followed by a lower high.

Head and Shoulders Top: A bearish reversal pattern marked by three (or more) prominent peaks with a middle peak (the head) that is higher than the other peaks (the shoulders).

head and shoulders top pattern
The head and shoulders top pattern is a pattern that will often form at the top of a trend. It signals that the trend will probably be coming to an end. It consists of 2 shoulders, (stock highs) and ...

Head and Shoulders Top Reversal Pattern
Figure 4.39: Head and shoulders top reversal principle.

Head and shoulders tops and bottoms.
Double and triple bottoms.
Channels and trends.
Rectangles and ranges.
Flags, pennants and wedges.
Symmetrical, ascending and descending triangles.

A Head and Shoulders Top is considered a bearish signal. It indicates a possible reversal of the current uptrend to a new downtrend.
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Description ...

The head and shoulders top is a "reversal" pattern. The formation marks a reversal in an upward trend of the stock's price - an uptrend is in the process of becoming a downtrend.
What does a classic head and shoulders top look like?

In a head and shoulders top formation, the stock reaches one plateau (the left shoulder), then goes higher (the top of the head), and then drops back to the plateau again (the right shoulder).

Head and Shoulders Top: A pattern characterized by a series of three peaks, the first and third being lower than the middle. Volume, heavy on the first peak, declines on the next two.

Second, it's preceded by three other bearish signals; a relatively small head and shoulders top (can you see it?), the flattening (and ultimately falling) of the moving average (simple 40-day) and the breaking of the trendline.

The first example below is showing a Head and Shoulders Top:
Notice the neckline I have drawn in Red and how I extended it for possible future support/resistance levels.

A head and shoulders top (which is considered predictive of a price decline) consists of a high price, a decline to a support level, a rally to a higher price than the previous high price, a second decline to the support level, ...

Now, combine that video with the weekly charts of all three major indices. You have a head and shoulders top on all three. Furthermore, a head and shoulders top is one of the most reliable chart patterns known to technical analysts! ...

The Triple Top is a reversal pattern of an uptrend. Similar to the head and shoulders top, the pattern features three prominent peaks, however in the case of the Triple Top all three peaks are at roughly the same price level.
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TRIN ...

Head and Shoulders: A pattern that has three peaks resembling a head and two shoulders. A head and shoulders top typically forms after a substantial rise and indicates a market reversal.

The Head And Shoulders Top/Bottom-Technical Indications
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As you can see in the chart below, the RSI crossover was a great confirmation of the head and shoulders top, a pattern which we learned about in previous lessons and that occurred recently in the EUR/USD.

See also: Head and Shoulders, Chart, Pattern, Stock, Trading