Head and shoulders is the most recognised reversal pattern in technical analysis. It marks the end of an uptrend with three peaks: a left shoulder, a higher head, and a right shoulder roughly level with the left — a clear loss of the trend's ability to make higher highs.
Anatomy
The two troughs between the peaks define the neckline. The pattern is not complete until price closes below that neckline — that break is the trigger. Until then it is just three bumps. The right shoulder failing to reach the head's high is the first tell that buyers are weakening.
Inverse head and shoulders
Flip it for a bottom: three troughs (the middle one lowest) with a neckline above, confirmed when price breaks up through the neckline. Same logic, opposite direction — it marks a downtrend losing the ability to make lower lows.
The measured move
A common target projects the distance from the head to the neckline, measured down from the break point. It is a guide, not a guarantee — treat it as a probabilistic objective, and always pair the pattern with volume (ideally fading into the right shoulder) and the higher-timeframe trend.