What Does a Head and Shoulders Chart Pattern Look Like?

Example of Head and Shoulders Chart Pattern

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

Summary:

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

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

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

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

Examples 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 Chart Pattern

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