Head and Shoulders Top
Three peaks with the middle one highest above a near-horizontal neckline, after a rise; completes on a close below the neckline.
The head and shoulders top is the classical reversal pattern of Edwards & Magee: a left shoulder high, a higher head, and a right shoulder at roughly the left shoulder's height, joined underneath by a neckline through the two reaction lows.
The right-shoulder high negates the pattern; Bulkowski finds a throwback to the neckline after about half of breakdowns.
How we define it
- Swings of at least 2 ATR: shoulder, low, head, low, shoulder; the pattern follows a rise
- Neckline: the two lows within 3% of each other (near-horizontal), tested at least twice; no close below it before the breakdown
- Head at least 3.5 ATR above the neckline and clearly above both shoulders; shoulders at 40-85% of the head height and within 35% of each other
- Minimum length: 2 months on 1D, 3 months on 1W, 10 days on 4H
- Breakout (up) / breakdown (down): the first candle close beyond the boundary by at least 3% on 1D and 1W (1.5% on 4H)
- Failed breaks: a breakout or breakdown that closes back inside the boundary within 6 candles on 4H, 5 on 1D or 3 on 1W is removed from the list
- Trend filter: breakouts only above the 200-period EMA (40-week EMA on 1W), breakdowns only below it
- Watchlist: the pattern is complete but unbroken and price is within 3% (or 1 ATR, at most 6%) of the boundary
No recent breakout or breakdown
No head and shoulders top has completed recently. See all patterns.
Nothing on the watchlist
No mature head and shoulders top is close to its breakout or breakdown level right now.