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What is Head and Shoulder Top Pattern?

It is important to understand the stock market terminology and the language used in the technical analysis as an informed trader is a better trader. Today we explain you the Head and Shoulders Top which is created by three successive rallies in the price following a significant uptrend.

The highest high (head) is in the middle, flanked by two lower highs (shoulders) at roughly the same level. Volume is highest as the price makes the first two rallies, then diminishes through the right shoulder. Finally volume surges as the price closes below the neckline (drawn between the two lows) to confirm the reversal.

We have tried to explain Head and Shoulders Top with the help of Manappuram stock chart analysis and same is shown as below in the screenshot. The detailed analysis of Manappuram stock post formation of Head and Shoulders Top can be read by clicking the given link above.

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