Eicher Motors (NSE: EICHERMOT)
Head and Shoulders formation
Head and Shoulder is one of the reliable trading reversal formation. This chart pattern helps traders to identify a reversal may be underway as the trend has exhausted itself. This reversal signals the end of an uptrend.
A Head and Shoulder includes a distinct ‘left shoulder’, ‘head’, ‘right shoulder’ and ‘neckline’ formation. When the price is breaking below the neckline, it indicates the bullish trend has reversed and that bears are likely take control of the stock. A short will be a good trading setup.
When the pattern seems to be forming, or in the middle of the formation, you shouldn’t assume that it will fully develop and make trades based on what you believe is going to happen. Be patient and watch the complete pattern development. Try to avoid over-anticipating.
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