What Does a Head and Shoulders Indices Chart Pattern Look Like?

Example of Head and Shoulders Indices Chart Pattern

Head and Shoulders Indices Chart Pattern is a Bearish Stock Indices Chart Pattern - Head and Shoulders Pattern is a Bearish Indices Trading Signal Pattern

Summary:

• This Head and Shoulders Indices Chart Pattern forms after an extended move upwards -indices upward trend
• This Head and Shoulders Indices Chart Pattern formation indicates that there will be a reversal in the stock indices trading market
• This Head and Shoulders Indices Chart Pattern formation resembles a head with shoulders thus its name.
• To draw the neckline we use chart point 1 and point 2 as shown on the stock indices trading example explained and illustrated below. We also extend this line in both directions.
• We sell when stock indices price breaks below the neckline; as explained on the stock indices trading example explained and illustrated below.

What Happens to Indices Price Action After a Head and Shoulders Indices Chart Pattern?

Or the head and shoulders stock indices chart pattern can also form on a slanting neckline, like the stock indices trading example explained and illustrated below:

What Happens to Indices Price Action After a Head and Shoulders Indices Chart Pattern?

Example of Head and Shoulders Indices Pattern on a Indices Chart

Technical Analysis of Head and Shoulders Stock Indices Chart Pattern - Example of Head and Shoulders Indices Chart Pattern

This Head and Shoulders Indices Chart Pattern can also be formed on a slanting neckline, like the head and shoulders stock indices chart pattern example above, the neckline does not have to be necessarily horizontal.