Head and Shoulders - Bearish Setup

Overview

The Head and Shoulders pattern is a classic bearish reversal structure that appears after an uptrend. It signals a potential shift in market sentiment where buying momentum weakens and sellers begin to take control.

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Concept

This pattern consists of three peaks:
• Left Shoulder – an initial high followed by a pullback.
• Head – a higher peak showing the final push by buyers.
• Right Shoulder – a lower peak indicating weakening bullish strength.

The pattern becomes significant when price breaks below the neckline, confirming a potential bearish reversal.

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Chart Explanation

1. The Left Shoulder forms as price rallies and then pulls back.
2. The Head forms when price makes a higher high but fails to sustain momentum.
3. The Right Shoulder forms with a lower high, indicating weakening buyers.
4. The neckline acts as the key support level connecting the swing lows.
5. A breakdown below the neckline confirms the bearish structure and suggests downside continuation.

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Observation

• The right shoulder forms with reduced momentum.
• Price begins to reject higher levels.
• A breakdown below the neckline signals growing selling pressure.

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Summary

The Head and Shoulders pattern indicates a transition from bullish to bearish market structure. Once the neckline breaks, the probability of further downside increases, often leading to a measured move toward the target zone.

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Disclaimer

📘 For educational purposes only.
🙅 Not SEBI registered.
❌ Not a buy/sell recommendation.
🧠 Purely a learning resource.
📊 Not Financial Advice.