Head and Shoulders Pattern

How to identify a head and shoulders pattern

• A prior uptrend for the pattern to reverse.
• Left shoulder: a peak, followed by a pullback.
• Head: a higher peak, followed by a pullback to roughly the same area as the first.
• Right shoulder: a lower peak than the head, roughly level with the left shoulder.
• Neckline: the line through the two pullback lows. A falling neckline is generally read as the weaker, more bearish version.

Is a head and shoulders pattern bullish or bearish?

Bearish. It shows buyers failing to make a new high on the third attempt after an advance. It is only complete on a close below the neckline. Volume often fades through the right shoulder and picks up on the break.

Price target

Measure from the head's high down to the neckline and project that distance downward from the breakout point. Like any measured move, it is a reference level rather than a forecast.

When the pattern fails

If price breaks the neckline and then closes back above it, or rallies above the right shoulder's high, the pattern has failed. Failed tops can be followed by sharp moves higher as traders positioned for the breakdown exit.

How has this setup performed historically?

Win rate = share of occurrences where the stock beat SPY over the window in the direction the signal predicted — for a bearish setup, a win means it underperformed. Measured since 2025-01-01 on our own detections, which puts the coin-flip line at 50%. Sample sizes are small; treat these as context, not as an edge.

Recent Head and Shoulders detections

From our daily published list over the past 12 months, newest first. Past detections, not recommendations — open a symbol for its chart and current status.

US stocks that have formed the Head and Shoulders most often

Counts are past detections by our scanner, not signals firing today. Follow a symbol through to its own page for the current reading.

Frequently asked questions

What is the neckline in a head and shoulders pattern?

The line connecting the two lows on either side of the head. It marks the level buyers defended twice; a close below it is what turns the shape into a completed pattern.

What is the difference between a head and shoulders and a double top?

Both are bearish reversal patterns confirmed by a neckline break. A double top has two peaks at about the same height; a head and shoulders has three, with the middle one highest.

What is the success rate of a head and shoulders pattern?

Across 269 scored detections, the Head and Shoulders moved the way it predicts relative to SPY 61% of the time over the next 20 trading days, with a mean excess return of +1.33%. A coin flip scores about 50%.

Further reading

• Guide: how the Head and Shoulders works
• Backtest: we tested 1,643 of our own pattern calls against SPY
• Browse every symbol we cover

Other patterns