What is a head and shoulders chart pattern?

The head and shoulders pattern is regarded as one of the most trustworthy chart patterns in technical analysis. As a result, both beginner and experienced traders use it to their advantage to find new trading opportunities.

What is a shoulder and a head in a stock market?

The first “shoulder” forms after a significant bullish period in the market when the price rises and then declines into a trough. The “head” is then formed when the price increases again, creating a high peak above the level of the first shoulder formation.

What are stock chart patterns?

Stock chart patterns include double tops, double bottoms, cup and handle, flags, and triangles (ascending, descending, and symmetrical). The most well-known pattern, however, is the head and shoulders formation that signifies a reversal of a bullish or bearish trend.

What is inverse head and Shoulders pattern?

An inverse head and shoulders, also called a "head and shoulders bottom," is similar to the standard head and shoulders pattern but inverted, with the head and shoulders top used to predict reversals in downtrends. It is a bearish-to-bullish indicator. What Is the Opposite of a Head and Shoulders Pattern?