Head and Shoulders
A reversal pattern with three peaks — a higher middle peak (head) between two lower peaks (shoulders) — that warns of a possible top.
The standard head-and-shoulders is a bearish topping pattern: a left shoulder, a higher head, then a lower right shoulder, all sitting on a 'neckline' support. A break below the neckline signals the uptrend may be reversing.
Its mirror image, the inverse head and shoulders, is a bullish bottoming pattern that breaks out above the neckline. The measured target is the distance from the head to the neckline, projected from the break.
On StockSetups
StockSetups detects head-and-shoulders structures but the board is long-only, so the bullish inverse head and shoulders is what surfaces as a tradable setup; bearish tops are filtered off the board.
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