Head and shoulders (chart pattern)

The left shoulder is formed at the end of an extensive move during which volume is noticeably high.

After the peak of the left shoulder is formed, there is a subsequent reaction and prices slide down somewhat, generally occurring on low volume.

[2] This formation is simply the inverse of a head and shoulders top and often indicates a change in the trend and market sentiment.

Another difference between the head and shoulders top and bottom is that the top formations are completed in a few weeks, whereas a major bottom (left, right shoulder or the head) usually takes longer, and as observed, may be prolonged for a period of several months or sometimes even more than a year.

[citation needed] When a stock drifts through the neckline on small volume, there may also be a wave up in some cases, although it has been observed that such a rally normally will not cross the general level of the neckline before selling pressure increases and a steep decline occurs, after which prices may due to greater volume.

Head and shoulders is a useful tool after its confirmation to estimate and measure the minimum probable extent of the subsequent move from the neckline.