Head and Shoulders strategy

A "head and shoulders" pattern is a chart formation that appears as a baseline with three peaks, the outside two are close in height and the middle is highest.  The head and shoulders pattern is believed to be one of the most reliable trend reversal patterns.

Inverted Head and Shoulder:
This pattern is the opposite of the popular head and shoulders pattern but is used to predict shifts in a downtrend rather than an uptrend.

The neckline is a level of support or resistance found on a head and shoulders pattern that is used by traders to determine strategic areas to place orders.