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:
“A decent chap, a real good sort,
Straight as a die, one of the best,
A brick, a trump, a proper sport,
Head and shoulders above the rest;
How many lives would have been duller
Had he not been here below?
Here’s to the whitest man I know
Though white is not my favourite colour.”
—Philip Larkin (1922–1986)
“The head must bow, and the back will have to bend,
Wherever the darkey may go;
A few more days, and the trouble all will end,
In the field where the sugar-canes grow.
A few more days for to tote the weary load,—
No matter, ‘t will never be light;
A few more days till we totter on the road:—
Then my old Kentucky home, good-night!”
—Stephen Collins Foster (1826–1884)
“I have often inquired of myself, what great principle or idea it was that kept this Confederacy so long together. It was not the mere matter of the separation of the colonies from the mother land; but something in that Declaration giving liberty, not alone to the people of this country, but hope to the world for all future time. It was that which gave promise that in due time the weights should be lifted from the shoulders of all men, and that all should have an equal chance.”
—Abraham Lincoln (1809–1865)
“Eloquence must be grounded on the plainest narrative. Afterwards, it may warm itself until it exhales symbols of every kind and color, speaks only through the most poetic forms; but first and last, it must still be at bottom a biblical statement of fact.”
—Ralph Waldo Emerson (1803–1882)