DAX Loves Head and Shoulders Pattern

5 Ara 2020

A Head and Shoulders pattern is a chart formation that appears as a baseline with three peaks, the outside two are close in height and the middle is highest. In Technical Analysis, it describes a specific chart formation that predicts a trend reversal. The head and shoulders pattern is one of the most used reversal patterns because of its good reliability.

Here the example of the DAX index, where the pattern has been effective 6 times in the last 13 years (Bullish-to-Bearish case).