Technical Chart Pattern: Head and Shoulders: PART 2

THIS IS PART 2 READ PART 1 FIRST TO GET ALL DETAILS 3. Trading Strategy Bearish Head and Shoulders: - Works across all timeframes, with higher timeframes (Daily, Weekly) offering stronger signals. - Volume confirmation is essential: Right shoulder forms with lower volume, indicating fading momentum. - Breakout Confirmation: A break below the neckline with high volume confirms a downtrend continuation. - Price Target: Distance from head to neckline is subtracted from the neckline. Bullish Inverse Head and Shoulders: - Volume: The right shoulder forms with increasing buying volume. - Breakout Confirmation: A break above the neckline confirms a bullish reversal. - Price Target: Distance from head to neckline is added to the breakout point. 4. Common Mistakes & False Signals - Trading before confirmation of neckline breakout. - Ignoring volume confirmation. - Steep neckline slopes reduce pattern. 5. Real-World Example & Application - Tata Steel (2021): Showed a Head and Shoulders pattern near Rs. 1400, resulting in a drop to Rs. 1000. HDFC Bank (2020): Formed an Inverse Head and Shoulders pattern near Rs. 800, rallying towards Rs. 1600. 6. Conclusion The Head and Shoulders pattern is one of the most reliable reversal patterns in technical analysis. It provides clear entry, stop-loss, and target levels. It is best used with volume confirmation and applies to stocks, forex, crypto, and commodities. thank you for Reading consider following as well.