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It is one of the price patters to create short position.
Conditions:
1. Significant rally before forming the above pattern.
2. The duration to form this structure is near about 3 months.
3. Volume in left shoulder may be high and low in right shoulder.
4. Head should be highest among the recent price action.
A low top followed by a high top and a low top forming the shape of a head with shoulders on both sides in wave pattern is called so. Volume at left low must be very high and the volume at the right shoulder will be low.
graphical representation should like head and two shoulders. Volume in left shoulder should be high and right shoulder should be low and price at the head point should be maximum. Duration between shoulders should be one month
Head and shoulder is a price pattern that occurs after a significant rally. This is a reversal pattern.
The head should be the highest among the recent price action
Volume should be high in the left shoulder and low on the right shoulder
The duration for the complete pattern should be at least 1 month
Short position can be considered when the price breaches the low of the right shoulder.
Head Shoulder is a pattern where you will have three peaks in which the middle is higher than the other two.
The patter should have been formed over a month.
The volume should be high at the left of the formation of the pattern.
We can sell the shares when the prices goes below the right shoulder.
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