Head and shoulders chart formation

Head and shoulders chart formation

Head and shoulders - This is a chart formation resembling a "M" in which the stock price:
- Rises to the top and then declines, then
- Rises above the former peak and again declines and then rises again, but not the second peak and again decreases.
The first and third peaks are shoulders, and the second peak forms the head. This model is considered a very bearish indicator.