Glossary › head and shoulders

Trading glossary · patterns

head and shoulders

A chart shape with three peaks, the middle one highest, like a head between two shoulders. A drop below its base can start a fall.

The fuller meaning

A bearish reversal pattern after a rise: a left shoulder, a higher head and a lower right shoulder, with a neckline joining the lows between them. It is confirmed by a close below the neckline; volume is often lighter on the right shoulder, and a rough target is the head-to-neckline distance projected down.

head and shoulders.

Related words

apex · ascending triangle · bear flag · bull flag · busted pattern · chart pattern · continuation · continuation pattern · converging lines · cup and handle