"Bullish Head and Shoulders" is a term used in technical analysis in financial markets. It's a reversal pattern that can indicate a potential change in the direction of a price trend.
The pattern consists of three peaks, with the middle peak (the "head") being higher than the two surrounding peaks (the "shoulders"). The line connecting the lows of the two troughs between the peaks is called the "neckline."
In a bullish head and shoulders pattern:
- The left shoulder forms as the price reaches a high, then declines.
- The head forms as the price rises higher than the previous high, then falls back.
- The right shoulder forms as the price rises again but fails to reach the height of the head, followed by another decline.
- The neckline connects the lows of the troughs between the peaks.
Traders often see the completion of a bullish head and shoulders pattern as a signal that a downtrend is losing momentum and that an uptrend may be forthcoming. However, like all technical analysis patterns, it's not foolproof, and other factors should be considered before making trading decisions.
The pattern consists of three peaks, with the middle peak (the "head") being higher than the two surrounding peaks (the "shoulders"). The line connecting the lows of the two troughs between the peaks is called the "neckline."
In a bullish head and shoulders pattern:
- The left shoulder forms as the price reaches a high, then declines.
- The head forms as the price rises higher than the previous high, then falls back.
- The right shoulder forms as the price rises again but fails to reach the height of the head, followed by another decline.
- The neckline connects the lows of the troughs between the peaks.
Traders often see the completion of a bullish head and shoulders pattern as a signal that a downtrend is losing momentum and that an uptrend may be forthcoming. However, like all technical analysis patterns, it's not foolproof, and other factors should be considered before making trading decisions.