Articles on: Investment Glossary

Head And Shoulders

A technical trading pattern that resembles a head and two shoulders. In a head and shoulders top formation, the stock reaches one plateau (the left shoulder), then goes still higher (the top of the head), and then drops back to the plateau again (the right shoulder). The head and shoulders top pattern signifies the reversal of an upward trend. A head and shoulders bottom pattern signifies the reversal of a downward trend.

Updated on: 24/04/2023

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