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Head and shoulders

Three peaks with the middle one highest, a classic topping pattern.

Chart PatternsIntermediate

Definition

The left shoulder, higher head and lower right shoulder show buyers losing strength. The neckline connects the lows between the peaks. A break below the neckline completes the pattern and suggests a possible trend change.

Watch out for

The right shoulder must fail to reach the head. A common rule projects the head-to-neckline distance down from the break, but this is only a guide.

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