What is Head and Shoulder? What are their conditions to determine the bearish trend?

[Darshan Sanwal]

There should be 3 points where by the stock prices movements should be like a head and shoulder. In the left shoulder I.e the initial Period of price rise the volume should be high..

during the right shoulder the volume traded should be low. The duration to form the head and shoulder should be 1 month each. hence the total head and shoulder should be atleast 3 months. once the price falls below the neck line short position can be created.

[Arif Jani]

Head and shoulder is a price pattern which shows distribution phase by strong hands. It basically consists of a Head and two shoulders. The shoulder on left side shows good volume, where as the right shoulder has low volume.When the price goes below  the neck line, it indicates a bearish trend. Here we can go for short position. The head and shoulder position takes at least 3 months to form.

[Deepika Nautiyal]

In technical analysis, a head and shoulders pattern describes a specific chart formation that predicts a bullish-to-bearish trend reversal. The head and shoulders pattern is believed to be one of the most reliable trends reversal patterns. It is one of the several top patterns that signal, with varying degrees of accuracy, that an upward trend is nearing its end with varying degrees of accuracy, that an upward trend is nearing its end.

CONDITIONS

Head should be highest among left and right shoulder
Left shoulder – High volume
Right shoulder – low volume
Duration of pattern – minimum 3 months
Short position to be created when it goes below neckline

[Thiyagharajan]

The pattern looks like a man with head (is tallest -high volume) and left shoulder,right shoulder.
This is a distribution pattern (stronger hand is trying to sell huge volume distributed over 3months)

identify left shoulder, right shoulder, head which is the tallest.
Minimum 3 months to form the pattern.
Left shoulder should be with high volume. This is caused by stronger hand trying to sell large volume.
Right shoulder should be with low volume which signals stronger hand is already moved out

we expect a bearish reversal trend since stronger hand is liquidating.
we create short position if the price goes below neck line.

[Vasanth]

. Head should be highest among the recent Price
. Volume should be high during the Left Shoulder.
. Volume must be low during the Right Shoulder.
. It takes minimum of 3 months to form

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