A worked example that explains the rule, not a stock price. The circle marks the first close beyond the level. The blue line is the target. The orange line is the invalidation. Prices are in the right-hand column, and sessions sit under the volume bar.Hollow green candles closed above their open, and filled red candles closed below it.
Numbers in the example chart
From the same calculation that draws the shape and writes the "Measuring the target" section below.
Trigger level
$95 · at the close of session 58
Target
110$
Invalidation
87$
Pattern height
15$
Chart span
70 sessions
What it is
The previous pattern flipped upside down: three bottoms, the middle one the deepest, with their highs on one neckline. It describes a seller who has spent his pressure · the decline after the head can no longer make a lower low.
Left shoulderA drop inside a downtrend, then a normal bounce.
HeadThe deepest low · the last sellers give up, often on high volume (a selling climax).
Right shoulderThe third low does not reach the depth of the head: sellers can no longer push price lower.
Neckline breakoutA close above the line on high volume. Without supporting volume it fails more often than it works.
Recognition rules
A clear downtrend before the left shoulder.
The head is the deepest low, and the shoulders are close to each other in depth.
The Neckline connects the two peaks of the head.
Volume should rise when the neckline breaks upward · without volume, the break is doubtful.
A close above the neckline is the signal.
Measuring the target
The depth of the head below the Neckline is added to the breakout point: Neckline at $95 and head at $80 ⇐ target at $110.
Where it fools you
A bullish breakout without supporting volume often fails, unlike a bearish pattern, which can fall under its own weight. In a broadly falling market, most bullish reversals fail however perfect they look.
Open the daily timeframe for any symbol and draw the pattern yourself. Your drawing is saved per symbol in your browser, and the terminal does not name or detect the pattern.
━ LevelNeckline
⇕ MeasureTarget equals pattern height
We do not detect chart patterns with a numeric rule: telling them apart takes judgment on the chart. Candlestick patterns with a numeric rule are detected daily by the candlestick pattern scanner.
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