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and prices usually decline through the support of
the preceding trend to end up at a point which is
relatively aligned with the previous low. Such price
movements then form the head of the formation.
iv. From the previous low, buyers enter the market again
but unfortunately they cannot maintain a material
price increase. Market prices then form a lower high
to form the right shoulder, where the high is reason-
ably aligned with the high of the left shoulder. Prices
then decrease to eventually break the neckline.
v. The final characteristic of the Head and Shoulders-
formation is the neckline. The neckline is formed
by joining the low at the end of the right shoulder
(beginning of the head) and the low at the end of
the head (beginning of right shoulder). This line can
either have an upwards or downwards