A head and shoulders pattern is a chart formation that is often seen as a bearish reversal signal in technical analysis. It is characterized by a peak (the “head”), followed by a higher peak (the “left shoulder”), and then another lower peak (the “right shoulder”). The pattern gets its name from the fact that it looks like a person’s head and shoulders.

The pattern is considered complete when the stock’s price falls below the “neckline” which is formed by connecting the low points of the head and shoulders. This pattern is considered to be a bearish reversal pattern, as it is often seen as a sign that the stock’s uptrend is coming to an end, and that the stock’s price is likely to fall in the future. However, it’s important to note that this pattern should be confirmed with other indicators and analysis, and not to be solely relied on.

Examples:

1. For example, if a stock’s price is trading at $100, and it hits a high of $120 (the head), followed by a high of $110 (the left shoulder) and then a high of $105 (the right shoulder) and falls below the neckline of $105, it might indicate a bearish reversal pattern.
2. Another example, if a stock’s price is trading at $50, and it hits a high of $55 (the head), followed by a high of $53 (the left shoulder) and then a high of $50 (the right shoulder) and falls below the neckline of $50, it might indicate a bearish reversal pattern.
3. A third example, if a stock’s price is trading at $70, and it hits a high of $75 (the head), followed by a high of $73 (the left shoulder) and then a high of $71 (the right shoulder) and falls below the neckline of $71, it might indicate a bearish reversal pattern.

Please note that these are just examples and it’s important to use other indicators and analysis to confirm a head and shoulders pattern before making any trading decisions.