It is one of the most reliable formations among the return formations. In a rising trend, this figure consists of three relative peaks. The first and last peaks are almost the same level and form the shoulders. The peak in the middle is higher and forms the head. The relative bottoms are between the shoulders, from the neckline. When the formation of this shape is complete, the neckline forms the main support line. When the formation of this formation is completed, the price jumps up one time or falls quickly below the neckline, or breaks down the neckline and goes down. Shoulder – Head – Shoulder formation is a pretty good market input signal for the investor. The last need to realize is to take the position in the sales direction with the downward movement of the parity.
Some examples of shoulder-head-shoulder formations are shown below.