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Technical analysis or Charting allows investors to use a range of patterns to assist them with timing their entry to and exit from positions. Head & Shoulders are reversal patterns (like double/triple tops/bottoms and wedges) that form at the top or bottom of a trend with the bottoms being Bullish and the tops being Bearish. Each can can be split into distinct sections that help identify when the patterns are forming, helping ready the investor for the next move, be it higher or lower.
Whilst trade objectives are calculated by assuming and projecting the height of the head and shoulders pattern, note that they don’t always deliver a move equating to the full pattern height. Sometimes they undershoot. Sometimes they overshoot. And the pattern itself is not always perfectly neat. What is most important is that overall pattern respects the general steps mentioned above.
Individual technical indicators should never be relied upon in isolation for trading decisions, however strong the signal may be. Ultimately they are one of many indicators, which may, in the majority, be pointing the other way. Always use look at other indicators (moving averages, trendlines, price, price patterns, volume) to assist in the final trading decision. Lastly, the current trend of a share should always be respected – preempting a change can prove costly.