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Thomas Bulkowski’s successful investment activities allowed him to retire at age 36. He is an internationally known author and trader with 30+ years of stock market experience and widely regarded as a leading expert on chart patterns. He may be reached at

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Bulkowski’s Complex Head-and-Shoulders Top

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Industrials (^DJI):
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Nasdaq (^IXIC):
S&P500 (^GSPC):
As of 04/16/2014
16,425 162.29 1.0%
7,592 124.75 1.7%
549 4.10 0.8%
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16,600 or 15,900 by 05/01/2014
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550 or 525 by 05/01/2014
4,250 or 3,900 by 05/01/2014
1,900 or 1,800 by 05/01/2014
Mutt Winners: None YTD

Written by and copyright © 2005-2013 by Thomas N. Bulkowski. All rights reserved.

For more information on this pattern, read Encyclopedia of Chart Patterns, Second Edition, pictured on the right, pages 421 to 437. That chapter gives a complete review of the chart pattern, compared to what is described below.

Complex head-and-shoulders tops are strong performers in a bull market, showing a small break even failure rate and large average decline if traded perfectly. Pullbacks occur almost two thirds of the time, so anticipate them happening.

Shows is a complex head-and-shoulders top

Complex Head-and-Shoulders Top

Important Bull Market Results for Complex Head-and-Shoulders Top

Overall performance rank (1 is best): 3 out of 21
Break even failure rate: 4%
Average decline: 23%
Pullback rate: 67%
Percentage meeting price target: 53%

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

Complex Head-and-Shoulders Top Identification Guidelines

CharacteristicDiscussion
Price trendUpward leading to the pattern.
ShapeA head-and-shoulders top with multiple shoulders or multiple heads, but rarely both.
SymmetryThe shoulders should peak near the same price, be nearly the same distance from the head, and look similar (both wide or both narrow peaks) compared to their mirror opposite.
VolumeUsually higher on the left side of the pattern.
NecklineJoins the lowest armpits and is often nearly horizontal. Rarely does it slope steeply.
ConfirmationThe pattern confirms as valid when price closes below an up-sloping neckline or below the right armpit when the neckline slopes downward.

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Complex Head-and-Shoulders Top Trading Tips

Consult the associated figure on the right.

Trading TacticExplanation
Measure ruleCompute the height from the highest head (A) to the neckline directly below (B) and then multiply it by the "percentage meeting price target" (see "Important Bull Market Results") before subtracting it from the breakout price (C). The breakout price is where price crosses an up-sloping neckline, or when the neckline slopes downward, use the right shoulder armpit. The figure to the right shows an example, but uses a head-and-shoulders top.
Price reversalPrice must have something to reverse, so if the rise leading to the pattern is small, expect a small decline.
ConfirmationWait for confirmation before placing a trade.
TrendsA short-term rise leading to the pattern results in the best post breakout performance.
Price velocityA high velocity rise leading to the pattern often results in a larger decline post breakout. The link to the left explores this.
Inner H&SIf the pattern shows an inner head-and-shoulders top, then trade it. The figure to the right shows an example.
NecklinePatterns with near horizontal necklines perform best.
Yearly middlePatterns in the middle third of the yearly price range perform best (this may change with more study samples).
Volume trendAn upward volume trend suggests better post breakout performance. The link to the left defines this while this link explains performance.
PullbacksPullbacks hurt post breakout performance. The link to the left defines terms while this link explains performance details.
SymmetryPatterns with an extended right shoulder perform worse. Symmetrical looking patterns also perform worse.

The measure rule for complex head-and-shoulder top chart patterns

The Measure Rule

An inner set of head-and-shoulders top chart patterns

Inner Head & Shoulders

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Complex Head-and-Shoulders Top Example

Adam & Adam double top chart pattern example

The figure on the right shows an example of a complex head-and-shoulders top chart pattern. This example has two left shoulders (LS), and two right shoulders (RS). The blue neckline is not very steep but if you use that as the standard breakout method, where price closes below a down-sloping neckline, it will be at a lower price than if you use the right shoulder armpit low (the dashed red line). The neckline, incidentally, joins the lowest low (armpit) to the left of the head with the lowest low (armpit) to the right of the head.

Notice how price at B returns to the launch point, A. This often occurs when price moves up quickly leading to the chart pattern -- a decline takes price nearly back to the staring price.

-- Thomas Bulkowski

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Other Complex Head-and-Shoulders Top Examples

See Also

Copyright © 2005-2013 by Thomas N. Bulkowski. All rights reserved. Your cell phone makes you twice as annoying.