Head & Shoulders
The famous topping pattern, its neckline, and the measured move it implies.
Head and shouldersA three-peak topping pattern signalling reversal. is the most famous reversal pattern, and once you see the story behind its three peaks it’s hard to unsee. It marks the moment an uptrendThe prevailing direction of price: up, down or sideways. runs out of strength.
- Left shoulder — a rally to a high, then a pullback (normal uptrendThe prevailing direction of price: up, down or sideways. behaviour).
- Head — a higher high, then another pullback to roughly the prior low. Still looks bullish… so far.
- Right shoulder — buyers try again but make a lower high than the head, then fade. The trendThe prevailing direction of price: up, down or sideways. of higher highs has broken.
- Neckline — the line connecting the pullback lows. When price breaks below it, the pattern confirms.
It even hints at how far price may fall: the “measured move.” Take the height from the head down to the neckline, and project that same distance downward from the neckline break — a rough target for the decline.
Is the measured-move target guaranteed?
No — it’s a probabilistic guide, not a promise. Price often reaches roughly that area, but can fall short or overshoot. Use it to set expectations and plan exits/risk, not as a certainty. Always pair it with a stop in case the pattern fails.