Head & Shoulder

Head and shoulders pattern is a reversal pattern i.e., when a trend changes its existing direction. This pattern forms when a stock reaches a high in an uptrend (the shoulder), pulls back and then reaches a higher high (the head), pulls back a second time and only reaches the first high (the shoulder). The baseline or the support line with three peaks is known as the neckline. It isn’t a head and shoulders pattern unless and until it breaks out of the neckline.