Head and shoulder pattern

A Head and Shoulders pattern is a bearish reversal chart pattern that typically forms after a sustained uptrend, signaling a potential trend reversal. It consists of three peaks: the left shoulder, a higher head, and the right shoulder, which is usually similar in height to the left shoulder. The lows between these peaks form the neckline, and a decisive breakdown below the neckline confirms the pattern, indicating that selling pressure has overtaken buying momentum. Traders often look for increased volume during the breakdown for confirmation, with the expected downside target estimated by measuring the distance from the head to the neckline and projecting it downward from the breakout point.