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Head and shoulders pattern: how to recognise it and what happens after the break

InteractiveFind the head and the shoulders yourselfThree clicks on the peaks of a real chart: the page draws the neckline and tells you whether the pattern is valid.Try it →

The head and shoulders on two real charts

Open in the chart
Reversal pattern · bearish · forms after an uptrend · confirmed by the break of the neckline
Head and shoulders
Nike, 2023-24: sessions from to · adjusted prices
InteractiveOne piece at a time
volumeperiod start 98.11left shoulderheadright shoulderbreaknecklinemeasured targettarget reached117.7768.7881.31Aug 21, 2023Nov 20, 2023Feb 22, 2024May 23, 2024Aug 23, 2024
BreakMarch 6, 2024Height20.3%Duration75 sessionsOutcometarget reached

Two patterns found by the same rule: one reaches its target, the other fails. Press a piece to watch the pattern form: the chart stops on that day.

−25.2% the measured target distance from the neckline, on the day of the break

What a head and shoulders is made of

Fig. 1 · Anatomy

left shoulderheadright shouldernecklineheightthe same heightmeasured targetbreak: a close below the necklineprior uptrendvolume: falls on the right shoulder, rises at the break
  • Three peaks after an uptrend: shoulder, head, shoulder. The head is the highest.
  • The neckline joins the two lows in between.
  • The pattern exists only with a close below the neckline: before that, it is a hypothesis.
  • The height (head minus neckline), projected below the break, gives the target.

After the break, and the variants

Fig. 2 · The pullback

breakpullback: the neckline, from belowneckline
  • After the break the price often returns to the neckline.
  • It gets there from below: the old support now rejects it.
  • It does not always happen: it is not a condition of the pattern.

Fig. 3 · The failed pattern

breakclose above the head: pattern cancelledlevel of the head
  • After the break the price climbs back above the neckline.
  • If it closes above the head, the pattern is cancelled.
  • The head is the level that says «I was wrong».

Fig. 4 · The inverse

headshouldershoulderbreak to the upside
  • The same pattern, upside down.
  • It forms at the end of a downtrend: three lows, the middle one the lowest.
  • The break of the neckline is to the upside.

Fig. 5 · The sloping neckline

RISING NECKLINEFALLING NECKLINEthe break comes soonergreater weakness, later break
  • The neckline is rarely horizontal.
  • If it rises, the break comes sooner.
  • If it falls, the pattern is weaker and the break comes later.

How to recognise it, piece by piece

in the Nike example

The prior uptrend

  • the pattern reverses a trend: without an uptrend there is nothing to reverse

Nike: the sessions before

The left shoulder

  • a peak, then a decline
  • usually on the heaviest volume of the pattern

$101.11 on · see it on the real chart

The head

  • a peak higher than the shoulder
  • the decline that follows returns close to the previous low

$118.49 on · see it on the real chart

The right shoulder

  • a peak below the head
  • lighter volume: the drive has run out

$103.16 on · see it on the real chart

The neckline

  • the line joining the two lows
  • it can slope: horizontal is not required

through $93.61 and $95.11 · see it on the real chart

The break

  • a close below the neckline: before that, the pattern does not exist
  • the height projected below the break gives the target

$94.09 on · see it on the real chart

Volume

  • falls from the left shoulder to the right
  • rises at the break: the confirmation many patterns lack

in figure 1

Interactive exerciseYour turn: find the head and the shoulders

three clicks on the peaks: the judge uses the thresholds of this page
  1. Click the three peaks of the pattern, in any order: the point snaps to the nearest high.
  2. The judge finds the two lows in between on its own and draws the neckline.
  3. Read the verdict: break, measured target and outcome.
Click here on the chart: pick the three peaks

No point yet: move the mouse over the chart, the dashed circle shows the high that will be snapped to.

Work out the measured target

High of the head
$
Neckline below the head
$
Neckline at the break
$
Head$118.49high of December 20, 2023
Neckline below the head$94.44the line through the two lows
Height$24.05head − neckline
Measured target$71.54neckline at the break − height
Nike 2023-24: neckline at the break $95.59 − height $24.05 = target $71.54. Reached on .

Where to go from here

Chart patterns

The other lessons in the guide

What is technical analysis

  • the study of price and volume to recognise the trend and the levels
  • three premises: price discounts everything, trends, history repeats
  • exercise: uptrend, downtrend or sideways on three real charts

Candlestick chart

  • the four prices of a session: body and shadows
  • green and red, long and short bodies, long shadows, the doji
  • find the candle on a real chart: the judge says yes or no with the numbers

Uptrend: higher highs and higher lows

  • higher highs and higher lows: how to recognize an uptrend
  • swing points, and the two signals that end a trend
  • mark the higher lows yourself on a real chart

Support and resistance

  • the level where the decline stopped, and the one where the rise stopped
  • touches, time and volume: how much a level counts; once broken, it switches roles
  • find the level yourself on a real chart: the judge counts the touches
The Nike chart in the platformcandles, volume and drawing tools to trace the necklineOpen a free accountcharts, indicators and watchlists without paying anything
The technical analysis guideevery lesson and the A-Z indexWhat a subscription includesscanner, alerts and the analysis tools on every market

Frequently asked questions

What is a head and shoulders in technical analysis?

A bearish reversal pattern: three peaks, the middle one (the head) higher than the two on either side (the shoulders), with the neckline joining the two lows in between. It is confirmed when the price closes below the neckline.

How do you calculate the target of a head and shoulders?

Measure the height, from the head down to the neckline below the head, and subtract it from the neckline on the day of the break. For Nike: 95.59 − 24.05 = 71.54 dollars.

What is the difference between a head and shoulders and an inverse head and shoulders?

The first forms after an uptrend and announces a decline; the inverse is the same pattern upside down, after a downtrend. Neckline and target are calculated the same way.

What is the pullback to the neckline?

The return of the price to the neckline, from below, after the break: the line that used to hold the price now rejects it.

Method and sources

The sources of this page: the books are cited, the text is ours
Source
Robert D. Edwards, John Magee, W.H.C. Bassetti, Technical Analysis of Stock Trends, 9th ed.: ch. 6, reversal patterns; ch. 32, measuring implications.
John J. Murphy, Technical Analysis of the Financial Markets: ch. 5, major reversal patterns.
Thomas N. Bulkowski, Encyclopedia of Chart Patterns, 2nd ed.

The two examples (Nike 2023-24 and Netflix 2025) are sessions from our archive, adjusted for dividends and corporate actions; the points of the pattern are verified at every update. The numbered figures are diagrams drawn to explain, not prices. This guide explains how the tools work: it does not contain investment recommendations and promises no returns. Our method · licence · report an error.