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1999issue C081

Construction first: extra shoulders, the neckline, and the diamond test

A complex-head-and-shoulders top is built from extra heads or extra shoulders, most often as one head with matching shoulders at roughly the same price. Draw the neckline through the valleys and treat a downside break as complete. A diamond-formation broadens then tightens, and a second-half volume fade is used to separate it from an ordinary head-and-shoulders.

  • A complex-head-and-shoulders top is constructed from extra heads and extra shoulders, and a single head with multiple shoulders is built more often than versions that add extra heads.
  • Construction usually matches the left-shoulder count to the right-shoulder count at roughly the same price, and a downside break of the neckline marks the structure complete.
  • Volume sequences do not repeat consistently enough to confirm or deny a complex-head-and-shoulders, so a volume-price-check is non-decisive for that pattern.
  • A diamond-formation broadens then consolidates, often as a symmetrical triangle, and a second-half volume decline is used to separate it from an ordinary head-and-shoulders.
Entries in this reading3 entries
Diamond pattern3 readingsCurrent trackHead and shoulders64 readingsVolume-price analysis129 readings

Count extra shoulders before naming the top

A complex-top is a loose family of irregular topping structures that do not match a single standard pattern definition. Construction comes first. Count the extra shoulders, then decide whether the figure is a complex-head-and-shoulders.

A complex-head-and-shoulders is a topping structure built from extra heads, extra shoulders, or both, instead of one head with one left and one right shoulder. Among complex tops, a single head with multiple shoulders is constructed more often than versions that add extra heads.

Match the shoulders and draw the neckline

Construction usually matches the left-shoulder count to the right-shoulder count and places those shoulders at roughly the same price. The neckline is a line through the intervening lows between the shoulders and the head. A downside break of that line marks the structure as complete.

Treat volume as non-decisive on a complex-head-and-shoulders

Volume sequences in the complex-head-and-shoulders top do not repeat consistently enough to confirm or deny the pattern. The volume-price-check treats volume as non-decisive for this figure.

Outline a diamond from broadening into tightening

A diamond-formation is a reversal geometry that starts as a broadening swing and later tightens, often into a symmetrical triangle. Trendlines through successive peaks and valleys outline the named geometry. That diamond geometry is observed more often after advances than after declines.

After a topside diamond, the vertical span at the widest part of the figure is used as a minimum projected distance from the breakout.

Use a late-stage volume fade to test for a diamond

A volume decline in the second half of the figure, similar to a standalone symmetrical triangle, is used to separate a diamond from an ordinary head-and-shoulders. The volume-price-check uses that second-half fade to support a diamond-formation label.

Educational research material, not investment advice. Historical source context does not establish present-day performance.
11 of 37 in the Head and shoulders track
19991-4 pp.Next on Head and shouldersDead-cat bounce, rollover, and failed reversalsA dead-cat bounce is specified as a violent decline, a later rebound, and then a continuation lower, not a one-day washout that immediately reverses.
All readings on this track · 37 readings
  1. 1982Head and shoulders as a three-path completion test
  2. 1984Stock low clusters as a cycle baseline
  3. 1985Four-phase construction of the head-and-shoulders reversal
  4. 1989Volume-confirmed reversal patterns, stops, and measured objectives
  5. 1991The journal as one checklist for taken and skipped trades
  6. 1991Head and shoulders as a direction hypothesis
  7. 1991Candlestick body and shadow construction with three-Buddha peaks
  8. 1992A three-count drill that binds candlesticks, head and shoulders, and entry rules
  9. 1997Constructing bump and run reversal channels
  10. 1998Testing reversal formations in bond futures
  11. 1999Construction first: extra shoulders, the neckline, and the diamond test
  12. 1999Dead-cat bounce, rollover, and failed reversals
  13. 1999Evaluating time gaps in bond reversal patterns
  14. 2000Constructing head and shoulders and double reversal patterns
  15. 2001Constructing broadening and complex bottoms
  16. 2001Constructing a slanted head-and-shoulders when the chart is tilted
  17. 2002Head and shoulders with dominant-cycle timing
  18. 2002Trendline breaks, right shoulders, and trailing stops
  19. 2003Confirmation tests for bearish top patterns
  20. 2003Commodity top hypotheses on a dollar rebound
  21. 2003A head-and-shoulders test during a bear rally
  22. 2004Pattern breakouts need a primary-trend filter
  23. 2004Reading candlestick closes on trendline and neckline tests
  24. 2004Candle diagnosis needs Western targets and stops
  25. 2004Head-and-shoulders neckline construction
  26. 2005A familiar chart condition is a hypothesis, not a completed decision
  27. 2005A 50-day ceiling and a rising-floor stalemate
  28. 2006A complete trading plan from philosophy to checklist
  29. 2006Thin-market head and shoulders with two averages and MACD confirmation
  30. 2010Head and shoulders as a playback-tested setup
  31. 2011Turning a head-and-shoulders outline into a breakout hypothesis
  32. 2011Volume-confirmed head and shoulders on AIG and Citigroup in 2007
  33. 2013Constructing head-and-shoulders milestone points
  34. 2013Head-and-shoulders geometry versus the filter stack
  35. 2013Algorithmic head-and-shoulders construction
  36. 2018International relative strength as a double-top case study
  37. 2019Structure invalidation before comfort-stops
By fieldChart patterns222 readingsBy year199959 readings
All 64 readings tagged Head and shoulders
Also on Head and shoulders5 readings
2003Constructing bullish bottom patterns from structure and confirmationDiamond pattern2018Classify diamond geometry before the breakoutDiamond pattern1985Four-phase construction of the head-and-shoulders reversal1989Volume-confirmed reversal patterns, stops, and measured objectives2001Constructing a slanted head-and-shoulders when the chart is tilted