Head & Shoulder Pattern

Head & Shoulder Pattern can also can be inverted. A reversal pattern that is one of the more common and reliable patterns. Head & Shoulder Pattern is comprised of a rally which ends a fairly extensive advance. It is followed by a reaction on less volume. This is the left shoulder. The head is comprised of a rally up on high volume exceeding the price of the previous rally. And the head is comprised of a reaction down to the previous bottom on light volume. The right shoulder is comprised of a rally up which fails to exceed the height of the head. It is then followed by a reaction down. this last reaction down should break a horizontal line drawn along the bottoms of the previous lows from the left shoulder and head. This is the point in which the major decline begins. The major difference between a head and shoulder top and head and shoulder bottom is that the bottom should have a large burst of activity on the breakout

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