Head and Shoulders Bottom
This formation is simply the inverse of a Head and Shoulders Top and often indicates a change in the trend and the sentiment. The formation is upside down in which volume pattern is different than a Head and Shoulder Top. Prices move up from first low with increase volume up to a level to complete the left shoulder formation and then falls down to a new low. It follows by a recovery move that is marked by somewhat more volume than seen before to complete the head formation. A corrective reaction on low volume occurs to start formation of the right shoulder and then a sharp move up that must be on quite heavy volume breaks though the neckline.
Another difference between the Head and Shoulders Top and Bottom is that the Top Formations are completed in a few weeks, whereas a Major Bottom (Left, right shoulder or the head) usually takes a longer, and as observed, may prolong for a period of several months or sometimes more than a year.
Read more about this topic: Head And Shoulders (chart Pattern)
Famous quotes containing the words head and, head, shoulders and/or bottom:
“There’s Margaret and Marjorie and Dorothy and Nan,
A Daphne and a Mary who live in privacy;
One’s had her fill of lovers, another’s had but one,
Another boasts, “I pick and choose and have but two or three.”
If head and limb have beauty and the instep’s high and light
They can spread out what sail they please for all I have to say....”
—William Butler Yeats (1865–1939)
“I am a lantern—
My head a moon
Of Japanese paper, my gold beaten skin
Infinitely delicate and infinitely expensive.”
—Sylvia Plath (1932–1963)
“One man with a head on his shoulders is worth a dozen without.”
—Elizabeth I (1533–1603)
“Unfortunately, we cannot rely solely on employers seeing that it is in their self-interest to change the workplace. Since the benefits of family-friendly policies are long-term, they may not be immediately visible or quantifiable; companies tend to look for success in the bottom line. On a deeper level, we are asking those in power to change the rules by which they themselves succeeded and with which they identify.”
—Anne C. Weisberg (20th century)