According to market technicians it is time to sell stock in a head-and-shoulders formation when ___________.
A) the price index pierces the left shoulder
B) the price index pierces the right shoulder
C) the price index pierces head
D) none of the above takes place.

Question

Quizplus · Accepted Answer

The head-and-shoulders formation is a technical pattern that signals a possible trend reversal. The formation consists of three peaks, with the middle peak being the highest (the head) and the other two peaks being lower (the shoulders). The neckline is drawn by connecting the lows of the left and right shoulders. The pattern is confirmed when the price index breaks below the neckline. Therefore, it is time to sell stock in a head-and-shoulders formation when the price index pierces the right shoulder, confirming the pattern's completion.

According to Market Technicians It Is Time to Sell Stock