Head and Shoulders and Inverted Head and Shoulders

Head and Shoulders is a bearish reversal pattern that signals a change in trend direction. It consists of three peaks – the left shoulder, the head (the highest peak), and the right shoulder. It suggests a bearish reversal after an uptrend, with a neckline connecting the lows of the shoulders.

Inverted Head and Shoulders: A bullish reversal pattern featuring three troughs – the left shoulder, the head (the lowest trough), and the right shoulder. The neckline connects the highs of the shoulders.