CHART EXAMPLES OF HEAD AND SHOULDERS PATTERNS / STOCKS

LXK / Lexmark International, Inc.

Great example of an inverted head and shoulders pattern at the end of a downtrend (bullish). Notice how the strength of the market (viewed by the Relative Strength Indicator or RSI),  waned on the inverted head and then the inverted right shoulder, but began to pick up as it approached the neckline. These are clear indications that an inverted head and shoulders is what you're looking at and that an upside breakout should be anticipated. Also, take note of the neckline test/retracement after the breakout. The retracement took the shape of a falling wedge/falling pennant and then quickly charged higher, resuming the bullish breakout. Classic.

This pattern was spotted on 11/30/01 (blue circle), and sent to subscribers in chartpatterns.com's Pattern Recognition Services Weekly Newsletter for the week of 12/2/01. To get alerted to high probability patterns like these and others you see on this site, simply subscribe to the Pattern Recognition Services Newsletter and have approximately 25-30 or more patterns sent to you every Sunday so you'll know what's hot and what's not for the coming week. 

The information contained here was gathered from sources deemed reliable, however, no claim is made as to its accuracy or content. This does not contain specific recommendations to buy or sell at particular prices or times, nor should any of the examples presented be deemed as such. There is a risk of loss in trading stocks and stocks options and you should carefully consider your financial position before making any trades.  The reference to statistical probabilities does not pertain to profitability, but rather to the direction of the market. The size and the duration of the markets move, as well as entry and exit prices ultimately determines success or failure in a trade and is in no way represented in these statistics. Furthermore,  no representation is being made that any of the examples shown resulted in actual trades. This is not, nor is it intended to be, a complete study of chart patterns or technical analysis and should not be deemed as such.

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