Head And Shoulders

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No, were not talking about the shampoo that clears you from dandruff.

We’re talking about the technical indicator. It is a very easy-to-spot pattern and often plays out exactly the way it’s intended to. There are two types, the normal head and shoulders pattern, and the head and shoulders reversal.

head and shoul

head and shoul reverse

As simply put as the graphics above, the second the share price breaks above or below the neck-line/confirmation line, it is indicative of a move targeting the height of the head.

Example using Sasol on the JSE:

H&S Revers

 

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