The head and shoulders chart is said to depict a bullish-to-bearish trend reversal and signals that an upward trend is nearing its end.
Investors consider it to be one of the most reliable trend reversal patterns.
Left shoulder: Price rise followed by a price peak, followed by a decline.
Head: Price rise again forming a higher peak.
Right shoulder: A decline occurs once again, followed by a rise to form the right peak, which is lower than the head.
Investors consider it to be one of the most reliable trend reversal patterns.
Left shoulder: Price rise followed by a price peak, followed by a decline.
Head: Price rise again forming a higher peak.
Right shoulder: A decline occurs once again, followed by a rise to form the right peak, which is lower than the head.