Series 7: 9.4.2.2.1 Bearish Patterns

9.4.2.2.1  Bearish Patterns

Head and shoulders—pattern will show a small peak (shoulder), followed by a large peak (head), followed by a small peak again (shoulder). When the second and most recent peak occurs, this signals that the price is about to drop rapidly and, hence, that it would be a good time to sell. After the completion of the head and shoulders pattern, the stock is expected to move through its support and continue to fall. A head and shoulders pattern predicts a downward trend in the stock.

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