Head-shoulder-bottom is a typical trend reversal pattern and a bullish pattern at the end of the market decline. The figure consists of left shoulder, lower shoulder, right shoulder and neckline. The trading volume of Sangu is gradually enlarged, which effectively breaks through the neckline resistance and forms a pattern. The height of stock price reversal is generally greater than the vertical height between the neckline and the lowest point. In the short market, the power of shorting keeps pushing the stock price to a new low, and the trading volume has increased to a certain extent. Due to a certain decline, the stock price rebounded briefly, but the trading volume did not increase correspondingly during the rebound process, and the active buying was not strong, and it was also suppressed by the downward trend line in form, forming a "left shoulder"; Then the stock price fell again, falling below the lowest point on the left shoulder. Then, with the continuous decline of the stock price, the trading volume decreased compared with the left shoulder, indicating that the downward momentum decreased. After that, the stock price rebounded, and the trading volume was enlarged compared with the left shoulder rebound stage, breaking through the downward trend line and forming a "head"; When the stock price rebounded to the left shoulder high, it fell for the third time. At this time, the transaction volume is obviously smaller than that of the left shoulder and head. When the stock price falls back to the low level of the left shoulder, the decline basically stabilizes to form a "right shoulder"; Finally, the stock price officially launched an upward trend. The turnover increased greatly, effectively breaking through the neckline mark, the turnover increased greatly, and the whole pattern was completed. A surge is coming.

(1) The head and shoulder bottom takes a long time to form, and the shape is relatively gentle, unlike the sharp and rapid head and shoulder top shape.

(2) The total turnover of the head-shoulder bottom shape is less than that of the head-shoulder top shape, which is caused by the panic selling at the top due to insufficient supply at the bottom;

(3) When the head-shoulder bottom shape breaks through the neckline, it must rise sharply to be effective, while when the head-shoulder top shape breaks through the neckline, it can fall indefinitely;

(4) The price of head, shoulders and bottom is more accustomed to reverse pumping after breaking through the neckline, because there are more safe traders.

(5) The neckline of the head, shoulders and bottom often inclines to the right. If the neckline leans to the right, it means that the market is strong.

morphological analysis

The trend of head, shoulders and bottom can be divided into the following different parts:

(1) fell sharply, then stopped falling and rebounded, forming the first trough, which is also commonly known as the "left shoulder". When the left shoulder part is formed, the trading volume shows signs of enlargement in the process of falling, but it tends to decrease when the left shoulder lowest point rises.

(2) The first rebound was blocked, the stock price fell again and fell below the previous low point, and then the stock price stopped falling again to form the second low point, which is also commonly known as the "head". When the head is formed, the transaction will increase.

(3) The third rebound was blocked again at the high point of the first rebound, and the stock price began to fall for the third time. However, the stock price stopped after it reached the position close to the first trough, and the trading volume shrank extremely. After that, the stock price rebounded again to form the third trough, which is commonly called "right shoulder". The third rebound, the turnover increased significantly.

(4) The high point of the first rebound and the high point of the second rebound are connected by a straight line, which is the "neckline" that hinders the stock price from rising. But when the third rebound matches the volume, this "neckline" will be broken and the stock price will stand above it.

"Head and Shoulder Bottom" Variant Morphology:

First, the neckline is not necessarily parallel. In fact, it can be tilted upward or downward.

Second, the "head and shoulder bottom" sometimes has a multi-shoulder or multi-shoulder steering pattern, which is more complicated, but never changes. It is worth noting that the greater the turning pattern, the greater the market outlook.

It is worth noting that if the trading volume does not increase significantly when the stock price breaks through the "neckline", it is likely to be a "false breakthrough". At this time, investors should sell on rallies and consider temporarily avoiding waiting and seeing.

Edit the market meaning of this paragraph.

The analytical significance of the head and shoulder base is no different from that of the head and shoulder top. It tells us that the long-term trend in the past has been reversed, and the stock price has fallen again and again. The second low point (head) was significantly lower than the previous low point, but it quickly turned around and rebounded upward. The subsequent decline in the stock price has been supported and rebounded, reflecting that the power of optimism is gradually changing the weak situation of the market in the past. When the high resistance line (neckline) of two rebounds is broken, it shows that the optimistic party has completely knocked down the weak party, and the buyer completely controls the whole market, not the seller.

The analysis of this form is:

(1) This is a turning point of a long-term trend, which usually appears at the end of a bear market.

(2) When the volume of the latest high point is lower than the previous high point, it implies the possibility of head and shoulders; When the third rebound fails to reach the final high point and the transaction continues to decline, experienced investors will seize the opportunity to sell.

(3) When the neck line of the head, shoulder and neck is broken, it is a real selling signal. Although the stock price has fallen by a considerable margin from the highest point, the decline has just begun, and investors who have not shipped continue to sell.

(4) When the neckline falls below, we can predict the level to which the stock price will fall according to this type of minimum decline measurement method. This measurement method is to draw a vertical line from the highest point of the head to the neckline, and then measure the same length downward at the point where the right shoulder breaks through the neckline. The measured price is the minimum amplitude of the stock decline.

Edit the main points of this paragraph.

(1) The shape of the top of the head and shoulders is similar to that of the bottom of the head and shoulders, and the main difference lies in the volume of transactions.

(2) When the neckline of the head, shoulders and bottom breaks through, it is a real buying signal. Although the stock price has risen to a certain extent from the lowest point, the upward trend has just begun, and investors who have not bought it should continue to chase after it. The way to measure the minimum increase is to draw a vertical line from the lowest point of the head and cross the neckline, and then measure the same height from the point where the right shoulder breaks through the neckline. The measured price is the minimum increase of the stock.

In addition, when the neckline resistance breaks through, there must be a surge in trading volume, otherwise it may be a wrong breakthrough. However, if the turnover increases gradually after the breakthrough, this pattern can also be confirmed.

(3) Generally speaking, the head, shoulders and bottom are relatively flat, so it takes a long time to complete.

(4) After breaking through the neckline, there may be a temporary callback, but the callback range cannot be lower than the neckline. If you fall below the neckline, or the stock price falls below the neckline level, you can't break through the neckline resistance, and you also fall below the head, which may be a failure of the head and shoulders.

(5) Head and shoulders are one of the most predictive types. Once confirmed, the increase will mostly exceed the minimum increase.

Edit this action suggestion.

In the process of the formation of the head and shoulders, the stock price breaks through this round of downward trend line as the first buying point; When the neckline of the head, shoulders and bottom breaks through, it is the second buying signal; When the stock price falls back to the neckline position, it is the third buying point. At this time, although the stock price has risen to a certain extent compared with the lowest point, the upward trend has just begun, and investors who have not bought it should continue to chase after it.

(1) is suitable for steady investors to buy when the neckline position is adjusted back. However, if the shares of Dark Horse, which have a strong trend, are often unable to be pulled back after a breakthrough, they may be disappointed because they have lost opportunities.

(2) It is suitable for enterprising investors to buy before the market closes on the day when the neckline position is broken. However, due to the high chasing price, it may be necessary to bear the risk of temporary locking, or it may be an invalid breakthrough and high locking.

(3) In order to get more profits, bold investors often start to open positions with "low head and shoulder bottom" when the right shoulder is formed, that is, according to the characteristics of symmetry in general, they buy when the right shoulder is close to the low point of the left shoulder.