bhavishya - head & shoulders
DESCRIPTION
Head and shoulders is a reversal chart pattern that when formed, signals that the security is likely to move against the previous trend.TRANSCRIPT
![Page 1: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/1.jpg)
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This is one of the most popular and reliable chart patterns in technical analysis.
![Page 3: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/3.jpg)
Head and shoulders is a reversal chart pattern that when formed, signals that the security is likely to move against the previous trend.
![Page 4: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/4.jpg)
Figure 1: Head and shoulders top is shown on the left. Head and shoulders bottom, or inverse head and shoulders, is on the right.
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As you can see in Figure 1, there are two versions of the head and shoulders chart pattern.
![Page 6: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/6.jpg)
Head and shoulders top (shown on the left) is a chart pattern that is formed at the high of an upward movement and signals that the upward trend is about to end.
![Page 7: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/7.jpg)
Head and shoulders bottom, also known as inverse head and shoulders (shown on the right) is the lesser known of the two, but is used to signal a reversal in a downtrend.
![Page 8: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/8.jpg)
Both of these head and shoulders patterns are similar in that there are four main parts: two shoulders, a head and a neckline.
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Also, each individual head and shoulder is comprised of a high and a low.
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For example, in the head and shoulders top image shown on the left side in Figure 1, the left shoulder is made up of a high followed by a low.
![Page 11: Bhavishya - Head & Shoulders](https://reader035.vdocuments.net/reader035/viewer/2022062308/5589f298d8b42aa66e8b45f3/html5/thumbnails/11.jpg)
In this pattern, the neckline is a level of support or resistance.
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Remember that an upward trend is a period of successive rising highs and rising lows.
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The head and shoulders chart pattern, therefore, illustrates a weakening in a trend by showing the deterioration in the successive movements of the highs and lows