Constructing head and shoulders and double reversal patterns

Construction as an assembly sequence

Head and shoulders and double top and bottom are reversal constructions assembled from price structure. The historical workflow names the swings, draws the neckline or the intervening peak, checks the volume sequence, and waits for breakout confirmation before treating the pattern as complete.

Double tops and double bottoms appear as reversal constructions, not continuation patterns. Completion still depends on the later breakout, not on the two swings alone.

Head and shoulders construction

A head and shoulders top is constructed from a final rally, the head, between two smaller rallies, the left and right shoulders. The neckline is drawn through the intervening lows.

Neckline construction is not restricted to a horizontal line. The same formation can be drawn with an upward-sloping or downward-sloping neckline.

Volume, slope, and the measuring objective

Volume is part of construction. It should be exceptionally heavy during the left shoulder and/or head, and buying volume should be noticeably lighter on the right-shoulder rally.

The minimum measuring objective for a completed head and shoulders pattern is the vertical distance from the head to the neckline, projected from the breakout in the breakout direction.

Bottoms, extra shoulders, and failures

A reverse head and shoulders, also called a head and shoulders bottom, forms after a decline. It uses the same measuring rule and may appear with upward-sloping or downward-sloping necklines.

Completion of a bottom reversal requires expanding volume on the breakout. Without that expansion the breakout is treated as suspect.

Multiple shoulders can be part of a valid construction. More shoulders imply a larger buyer-seller contest, and those breakouts are normally treated as more significant than a single-shoulder version.

A head and shoulders failure is constructed when price either falsely breaks down or avoids a break by rallying a third time from the neckline. Early failure clues include a break above the down trendline from the head to the right shoulder, then a rally above the right shoulder, then a rally above the head.

Double top and bottom construction

A double bottom is constructed from two reactions near the same level. It is completed only when the rally after the second bottom takes price above the intervening peak. The first low is typically high-volume and the second low is typically quieter, while a valid upside breakout still needs expanding volume.

Double tops and double bottoms appear as reversal constructions, not continuation patterns. The second peak's rally is significantly weaker than the first, which is used as a construction clue that buyers have less interest.