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WHAT IS A HEAD-AND-SHOULDERS (H&S) PATTERN ?

WHAT IS A HEAD-AND-SHOULDERS (H&S) PATTERN ?

A head-and-shoulders pattern is a Price Action reversal pattern found on an uptrend. The pattern is characterized by having 3 peaks, with the middle (the head) being highest, and the two smaller peaks on either side (these are the left and right shoulders). A straight line is then drawn to connect the base of the 3 peaks, and that is called the neckline. A break of the neckline will signal a reversal to the downside. An inverted head-and-shoulders pattern is the same, but flipped horizontally and found when price is on a downtrend.  

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