As of 10/20/2021
Indus: 35,609 +152.03 +0.4%
Trans: 15,462 +157.20 +1.0%
Utils: 916 +13.91 +1.5%
Nasdaq: 15,122 -7.41 0.0%
S&P 500: 4,536 +16.56 +0.4%
|
YTD
+16.3%
+23.6%
+6.0%
+17.3%
+20.8%
|
 36,000 or 34,600 by 11/01/202116,100 or 14,500 by 11/01/2021925 or 860 by 11/01/202115,400 or 14,200 by 11/01/20214,600 or 4,250 by 11/01/2021 |
As of 10/20/2021
Indus: 35,609 +152.03 +0.4%
Trans: 15,462 +157.20 +1.0%
Utils: 916 +13.91 +1.5%
Nasdaq: 15,122 -7.41 0.0%
S&P 500: 4,536 +16.56 +0.4%
|
YTD
+16.3%
+23.6%
+6.0%
+17.3%
+20.8%
| |
|
36,000 or 34,600 by 11/01/202116,100 or 14,500 by 11/01/2021925 or 860 by 11/01/202115,400 or 14,200 by 11/01/20214,600 or 4,250 by 11/01/2021 | ||
Statistics updated on 8/26/2020.
For more information on this pattern, read
Encyclopedia of Chart Patterns
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$ $ $
 Head-and-Shoulders Top
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Head-and-Shoulders Top: Important Bull Market ResultsOverall performance rank (1 is best): 9 out of 36
Break even failure rate: 19%
Average decline: 16%
Pullback rate: 68%
Percentage meeting price target: 51%
The above numbers are based on more than 2,800 perfect trades. See the glossary for definitions. |
| Characteristic | Discussion |
| Price trend | Upward leading to the pattern |
| Shape | Looks like a head perched atop two shoulders. A three-peak pattern with the middle peak above the others. The pattern should look like a person's head and shoulders, proportional, and not lopsided. |
| Symmetry | The two shoulders should peak near the same price, be nearly the same distance from the head, and look similar (both wide or both narrow peaks). |
| Volume | Highest on the left shoulder followed by the head. Trends downward 61% of the time. |
| Neckline | Joins the two armpits. |
| Confirmation | The pattern confirms as a valid one when price closes below an up-sloping neckline or below the right armpit when the neckline slopes downward. |
| Trading Tactic | Explanation | 
The Measure Rule
|
| Measure rule | Compute the height from the head (A in the Measure Rule figure to the right) to the neckline directly below (B) then multiply it by the above 'percentage meeting price target.' Subtract the result from the breakout price (C). The breakout price is where price crosses an up-sloping neckline, or when the neckline slopes downward, use the right shoulder armpit. | |
| Price reversal | Price must have something to reverse, so if the rise leading to the pattern is small, expect a small decline. | |
| Confirmation | Wait for confirmation before placing a trade. | |
| Trends | A short- to intermediate-term rise leading to the pattern results in the best post breakout performance. | |
| Velocity | A high velocity rise leading to the pattern often results in a larger decline post breakout. | |
| Yearly high | Patterns within a third of the yearly high perform worst, but the differences are slight. | |
| Pullbacks | Pullbacks hurt post breakout performance. |
The above figure shows an example of a Head-and-shoulders top chart pattern. The left shoulder (LS) appears above the right shoulder (RS). But, the two shoulders appear symmetrical about the head. A neckline shown in blue, joins the two armpits. Where price closes below the neckline, a breakout occurs and it also confirms the chart pattern as being a valid head-and-shoulders top. A pullback occurs in this example just to make trading interesting.
-- Thomas Bulkowski
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