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, shoulders and/or bottom:
“My father upon the Abbey stage, before him a raging crowd.
“This Land of Saints,” and then as the applause died out,
“Of plaster Saints;” his beautiful mischievous head thrown back.”
—William Butler Yeats (1865–1939)
“He had a son whose name was Saul, a handsome young man. There was not a man among the people of Israel more handsome than he; he stood head and shoulders above everyone else.”
—Bible: Hebrew, 1 Samuel 9:2.
“There is something in the breast of almost every man, which at bottom takes offense at the attentions of any other man offered to a woman, the hope of whose nuptial love he himself may have discarded. Fain would a man selfishly appropriate all the hearts which have ever in any way confessed themselves his.”
—Herman Melville (1819–1891)