Head and shoulders

Идея простыми словами

The left shoulder and head are made in an uptrend. The right shoulder fails to reach the head's high: buyers are weaker. When the price breaks the neckline, the uptrend has turned. Upside down, it is a bottom pattern.

Как считается

Click the start, left shoulder, first low, head, second low, right shoulder and the end. The tool draws the neckline through the two lows, then the targets (61.8% and 100% of the head's height measured from the neckline) and a stop beyond the right shoulder.

Target after the break ≈ neckline − (head − neckline)

Как использовать

• Sell (or exit longs) on a close below the neckline; place a stop above the right shoulder.
• Measure the target as the head's height projected from the neckline.

Выводы

• Volume often falls on the right shoulder and rises on the break.

На что обратить внимание

• Many patterns never break the neckline; wait for the break.

Немного истории

Described by Richard Schabacker in the 1930s and by Edwards and Magee in "Technical Analysis of Stock Trends" (1948).