A Head and Shoulders is a bearish reversal pattern with three peaks — a higher middle peak (the head) between two lower peaks (the shoulders) — resting on a support line called the neckline. A close below the neckline signals the uptrend may be turning down.
How traders trade it
- Enter on a decisive close below the neckline.
- Project the head-to-neckline height downward for a target.
- A retest of the neckline from below often confirms the break.
See it in dtcharts
Scan for the head and shoulders across markets in the dtcharts terminal — or draw it by hand with the charting tools.