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Chart Part 3: Reversal Patterns (Head & Shoulders, Double Top/Bottom)

How uptrends and downtrends end: the classic reversal shapes with neckline triggers.

By DigitalNepal · Updated 2026-10-04 · Verify current figures on official sources

A

Try it right here:

Chart school uses sample drawings - never real prices. Learn shapes here, practise on live charts without money, and read the risk guide before trading a single rupee.

Read any single day: who won, buyers or sellers.

86.491.897.2102.6O 100 H 101 L 96 C 971O 97 H 98 L 93 C 942O 94 H 95 L 88 C 93.53O 93.5 H 97 L 92 C 96.54O 96.5 H 100 L 96 C 99.55
Sample data for learning - not real prices. Hover any candle for O/H/L/C.

HammerBullish

After a fall, price drops hard inside the day but buyers push it back up near the open. Small body on top, long lower wick (2x body). Means sellers tried and failed.

Confirm first: Next candle closes above the hammer high, ideally with bigger volume.

Reversal patterns show exhaustion: the old trend tries to continue and fails in a recognisable shape. Select each pattern in the Chart School tool (Classic group) and watch the shape form candle by candle.

Every reversal needs a trigger line: neckline, valley or peak. No break = no pattern, just a wobble.

Steps

  1. 1Head and Shoulders

    Three hills, middle highest. Draw the neckline through the two valleys. A daily close below it confirms - target roughly the head height.

  2. 2Inverse Head and Shoulders

    Same upside-down at bottoms. Break above the neckline confirms the downtrend likely ended.

  3. 3Double Top (M)

    Same high tested twice, fails twice. The middle valley is the trigger - close below it to confirm.

  4. 4Double Bottom (W)

    Same low tested twice, holds twice. Close above the middle peak to confirm.

Good to know: Second tops/bottoms on weaker momentum (slowing rise into the level) are the most reliable. Rushing the first touch gets you chopped.

Information last verified: 2026-10-04. Prices, fees, rules and requirements change - confirm on the official website or office before acting. DigitalNepal.tech is independent and not affiliated with any provider or government body.

FAQ

Do patterns work on NEPSE?

Shapes reflect human behaviour so they appear everywhere, but thin, circuit-limited scrips distort them. Prefer liquid, high-volume stocks for classical patterns.

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