Head & Shoulders
A head and shoulders top is the best-known bearish reversal: a high (the head) sits between two lower highs (the shoulders), with the intervening lows forming a neckline. A break below the neckline conventionally confirms the reversal.
- Bias
- Bearish
- Category
- Short Setups
- Scan cadence
- Every close
What has to be true for a Head & Shoulders to trigger
- A central peak clearly higher than the two flanking peaks
- Two shoulders at broadly comparable levels
- A definable neckline across the intervening lows
- Reasonable symmetry between left and right shoulder
How PatternGrade grades it
Shoulder symmetry, a clearly higher head and a well-defined neckline raise the grade.
Every scanner grades its hits A+, A or B from the pattern's own measurable structure. The grading is deterministic — the same chart always produces the same grade. It describes how closely the chart matches the pattern, not how likely anything is to happen; no hit rate or probability is attached to a grade. The reasoning is set out in the methodology.
What a Head & Shoulders looks like in practice
A stock rallies to $94 (left shoulder), pulls back to $85, runs to $101 (head), falls to $84, then rallies only to $92 (right shoulder) before turning down. The two troughs at $85 and $84 define a roughly horizontal neckline. Volume is heaviest on the advance to the left shoulder, noticeably lighter on the push to the head, and lighter still on the right shoulder.
How a Head & Shoulders fails
The right shoulder exceeds the head. Once price makes a new high the topping structure is gone and the stock is simply still advancing. The other failure is at the neckline: price breaks below it, then reclaims it within a few sessions. That is a false breakdown, and it is common because the neckline is the most-watched level on the chart and stops cluster just beneath it.
What this pattern is telling you
The pattern is incomplete until the neckline breaks, and necklines are often redrawn in hindsight. Many candidate tops simply resume higher.
PatternGrade is not a financial advisor and does not give buy or sell recommendations. Targets and stops shown on a pattern are reference levels derived from its geometry, not advice.
How to scan for Head & Shoulders setups
PatternGrade rescans every liquid US stock (~4,500 names) for this pattern after every close and returns the hits as a graded list, with the pattern drawn on each chart, so you review setups rather than hunt for them.
Join the waitlist to be invited when sign-ups reopen and see the current Head & Shoulders list, or browse all 75 patterns.
Head & Shoulders FAQ
Is head and shoulders bearish?
Yes. It is the standard topping reversal, conventionally confirmed when price closes below the neckline drawn across the lows between the peaks.
How do I screen for head and shoulders patterns?
PatternGrade's scanner measures shoulder symmetry, head height and neckline definition across every liquid US stock after each close, grading each detection A+, A or B.
Is head and shoulders a reliable pattern?
It is the best-known reversal pattern in technical analysis and has a coherent structural argument: three waves of buying, each weaker than the last. It is also the most over-identified pattern there is, because almost any three-peak sequence can be squinted into one. Its measured performance depends heavily on how strictly it is defined, which is why PatternGrade uses mechanical rules rather than interpretation.
Does the neckline need to be horizontal?
No. A downward-sloping neckline is generally read as more bearish, since it means each trough was lower than the last. A steeply upward-sloping neckline weakens the pattern considerably and is a common source of false identifications.
When is the pattern confirmed?
On a decisive close below the neckline. Until then it is three peaks, which is not yet a reversal. Plenty of would-be head and shoulders patterns simply resolve upward instead. PatternGrade reports it as a detected setup with the neckline drawn as the structural reference.
What is the measured target?
Conventionally the distance from the head down to the neckline, projected downward from the break. It is a geometric projection derived from the shape, not a forecast, and it is reached considerably less often than the textbooks suggest.
Patterns a Head & Shoulders is mistaken for
- Triple Top
- A triple top has three highs at roughly the same level. A head and shoulders has three with the middle clearly highest.
- Double Top
- Two highs rather than three. If there is no third peak, it is a double top.
- Inverse Head & Shoulders
- The bullish mirror at a bottom: three lows with the middle deepest.
- Rounded Top
- A rounded top is a smooth dome with no discrete peaks. If you can point at three separate highs, this pattern fits.
Last reviewed . Structure and grading for the Head & Shoulders are reviewed against the scanner's own rules.