Chart patterns · Intermediate

Head and Shoulders Pattern

A 1-minute lesson from the MarketPro academy, one of 22 in chart patterns.

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Short answer

The head and shoulders pattern is a classic reversal formation that appears after an uptrend and is made up of three peaks: a higher middle peak (the head) flanked by two lower peaks of roughly similar height (the shoulders). Connecting the low points between the peaks forms a "neckline," which acts as the key reference level for the pattern.

The head and shoulders pattern is a classic reversal formation that appears after an uptrend and is made up of three peaks: a higher middle peak (the head) flanked by two lower peaks of roughly similar height (the shoulders).

Connecting the low points between the peaks forms a "neckline," which acts as the key reference level for the pattern. A decisive close below the neckline is traditionally viewed as confirmation that the reversal from uptrend to downtrend may be underway.

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Lesson 1 of 22 in Chart patterns

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