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left shoulder should have high volume and right should have low volume. it should take min 3 months to form this pattern.
This is a reversal pattern.
A taller head flanked by 2 shorter heads.
This head and shoulder pattern depicts strong hands are exiting the market by eventually selling their stocks.
<p style=”text-align: right;”>The left shoulder has high volume. When the strong hand starts selling. The head depicts a time the strong hand is buying and selling stock sporadically and eventually sells all his stock and exists market . This is depicted by right shoulder which has very low volume.</p>
You can take short position once price falls below the neckline.<p style=”box-sizing: border-box; margin: 0.85em 0px; direction: ltr; color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Conditions:</p>
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<li style=”box-sizing: border-box; direction: ltr; background: 0px center; margin: 0px; width: 908px; float: left; list-style-type: decimal;”> Head and shoulder structure is first identified.
<li style=”box-sizing: border-box; direction: ltr; background: 0px center; margin: 0px; width: 908px; float: left; list-style-type: decimal;”> Minimum 3 months is required between the shoulders.
<li style=”box-sizing: border-box; direction: ltr; background: 0px center; margin: 0px; width: 908px; float: left; list-style-type: decimal;”> Volume should be high at the left shoulder indicating the intervention of a stronger hand.
<li style=”box-sizing: border-box; direction: ltr; background: 0px center; margin: 0px; width: 908px; float: left; list-style-type: decimal;”> Volume should be low at the right shoulder that shows the exit of stronger hand.<span style=”color: #777777; font-family: ‘Roboto Slab’; font-size: 13px;”>Short position can be created when the price goes below the neckline.</span>
In between the Double top pattern long High top is exist is called as Head and shoulder.
L.S volume should be greater than R.S volume.
Time period for occurrence is 3 month.
Head should be highest among the recent price.
Short position is considered below the neck line.
This is represented by 3 tops with the middle one being the tallest among them, forming a head like shape with two shoulders. The minimum time period is 3 months.
The left hand shoulder should have high volume and the right hand shoulder should have low volume.
You need to go short when the price line crosses below the neckline of the right hand shoulder bottom.
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