Head and Shoulders Top
Head and Shoulders formation consists of a left shoulder, a head, and a right shoulder and a line drawn as the neckline. The left shoulder is formed at the end of an extensive move during which volume is noticeably high. After the peak of the left shoulder is formed, there is a subsequent reaction and prices slide down to a certain extent which generally occurs on low volume. The prices rally up to form the head with normal or heavy volume and subsequent reaction downward is accompanied with lesser volume. The right shoulder is formed when prices move up again but remain below the central peak called the Head and fall down nearly equal to the first valley between the left shoulder and the head or at least below the peak of the left shoulder. Volume is lesser in the right shoulder formation compared to the left shoulder and the head formation. A neckline is drawn across the bottoms of the left shoulder, the head and the right shoulder. When prices break through this neckline and keep on falling after forming the right shoulder, it is the ultimate confirmation of the completion of the Head and Shoulders Top formation. It is quite possible that prices pull back to touch the neckline before continuing their declining trend.
Read more about this topic: Head And Shoulders (chart Pattern)
Famous quotes containing the words head and, head, shoulders and/or top:
“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)
“In the fell clutch of circumstance,
I have not winced nor cried aloud:
Under the bludgeonings of chance
My head is bloody, but unbowed.”
—W.E. (William Ernest)
“As Labor is the common burthen of our race, so the effort of some to shift their share of the burthen on to the shoulders of others, is the great, durable, curse of the race.”
—Abraham Lincoln (1809–1865)
“the cat
climbed over
the top of
the jamcloset”
—William Carlos Williams (1883–1963)