Is Head and Shoulders Trading Pattern Bullish or Bearish?

Head and Shoulders Chart Pattern

Head & Shoulders Chart Pattern is a Bearish Stock Pattern - Head and Shoulders Pattern is a Bearish Stocks Signal Pattern

Summary:

• This Head & Shoulders Chart Pattern forms after an extended move upwards - stocks upwards trend
• This Head & Shoulders Pattern formation indicates that there will be a reversal in the stocks market
• This Head & Shoulders Pattern formation resembles a head with shoulders thus its name.
• To draw the neckline we use chart point 1 & point 2 as shown on the stocks example illustrated and explained below. We also extend this line in both directions.
• We sell when the price breaks-out below neckline: as explained on the stocks example illustrated and explained below.

What Does Head & Shoulders Chart Pattern Mean?

Or the head and shoulders chart pattern can also form on a slanting neck line, like the stocks example illustrated and explained below:

What Does Head & Shoulders Chart Pattern Mean?

Example of Head & Shoulders Stocks Pattern on a Stocks Chart

Technical Analysis of Head and Shoulders Pattern - Example of Head and Shoulders Chart Pattern

This Head & Shoulders Chart Pattern can also be formed on a slanting neck line, like the head and shoulders pattern example above, the neck-line doesn't have to be necessarily horizontal.