As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019
As of 11/13/2019
  Indus: 27,784 +92.10 +0.3%  
  Trans: 10,843 -116.63 -1.1%  
  Utils: 844 +12.11 +1.5%  
  Nasdaq: 8,482 -3.99 0.0%  
  S&P 500: 3,094 +2.20 +0.1%  
YTD
 +19.1%  
 +18.2%  
 +18.4%  
 +27.8%  
 +23.4%  
  Targets    Overview: 10/31/2019  
  Up arrow28,200 or 27,100 by 12/01/2019
  Up arrow11,300 or 10,100 by 11/15/2019
  Up arrow870 or 800 by 12/01/2019
  Up arrow8,700 or 8,200 by 12/01/2019
  Up arrow3,150 or 2,950 by 11/15/2019

Bulkowski's Complex Head-and-Shoulders Bottom

 

Statistics updated on 11/15/18. Rank updated on 7/26/19.

For more information on this pattern, read Encyclopedia of Chart PatternsEncyclopedia of Chart Patterns book., pictured on the right, pages 390 to 404. That chapter gives a complete review of the chart pattern, compared to what is described below.

If you click on the above link and then buy the book (or anything) while at Amazon.com, the referral will help support this site. Thanks.

-- Tom Bulkowski

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A complex head-and-shoulders bottom is a chart pattern that looks like an inverted head-and-shoulders but with multiple heads, multiple shoulders, or sometimes both. The break even failure rate is low and the performance is good from this chart pattern.

Important Results
Identification Guidelines
Trading Tips
Example
Other Examples
See Also

A complex head-and-shoulders bottom appears

Complex Head-and-Shoulders Bottom

Complex Head-and-Shoulders Bottom: Important Bull Market Results

Overall performance rank (1 is best): 2 out of 56
Break even failure rate: 7%
Average rise: 47%
Throwback rate: 66%
Percentage meeting price target: 72%

The above numbers are based on 931 perfect trades. See the glossary for definitions.

Complex Head-and-Shoulders Bottom: Identification Guidelines

CharacteristicDiscussion
Price trendDownward leading to the pattern.
ShapeA head-and-shoulders bottom with multiple shoulders or multiple heads but rarely both.
SymmetryThe shoulders should bottom near the same price, be nearly the same distance from the head, and look similar to their mirror opposite.
Volume trendUsually higher on the left side of the pattern. Trends downward 66% of the time. The link to the left gives an example and this link discusses performance.
NecklineJoins the highest armpits.
ConfirmationThe pattern confirms as a valid one when price closes above a down-sloping trendline or above the right armpit when the neckline slopes upward.

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Complex Head-and-Shoulders Bottom: Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation

Head-and-shoulders chart pattern measure rule

The Measure Rule

Measure ruleCompute the height from the head low (A) to the neckline (B) directly above then multiply it by the 'percentage meeting price target (see above "Important Bull Market Results").' Add the result to the breakout price (C). The breakout price is where price crosses a down-sloping neckline, or when the neckline slopes upward, use the peak of the right shoulder armpit. The figure to the right shows an example for a regular head-and-shoulders bottom.
Price reversalPrice must have something to reverse, so if the decline leading to the pattern is small, expect a small rise.
ConfirmationWait for confirmation (breakout) before placing a trade. I show point C as the confirmation point in the figure.
NecklinePatterns with down-sloping necklines perform better. The green neckline on the chart to the upper right shows an example (Measure Rule figure).
Yearly middlePatterns having breakouts in the middle third of the yearly price range perform best.
Volume trendAn upward volume trend suggests better post breakout performance.
ThrowbacksThrowbacks hurt post breakout performance as the study discusses.
SymmetrySymmetrical looking patterns perform best (that is, the two outermost shoulders are the same or nearly the same distance from the head).

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Complex Head-and-Shoulders Bottom: Example

Complex head-and-shoulders chart pattern example

The above figure shows an example of a complex head-and-shoulders bottom chart pattern. This complex head-and-shoulders has a dual head. Additional shoulders too far away to really be part of the chart pattern are located at A and B.

Price breaks out in August but quickly throws back (B). A throwback occurs 66% of the time in a bull market.

-- Thomas Bulkowski

Top of page More

Complex Head-and-Shoulders Bottom: Other Examples

See Also

 

Support this site! Clicking any of the books (below) takes you to Amazon.com. If you buy ANYTHING while there, they pay for the referral.

My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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