A bearish reversal pattern may form when sentiment changes on a stock that has been in an uptrend.

Head and Shoulder -Top.

The Head and Shoulders pattern is one of the most widely known and recognized patterns. The duration for this pattern is generally several months. The trading volume generally diminishing from the left of the pattern to the right. The neckline could slope upward or downward although it is shown level here. As with all patterns, wait for confirmation. The pattern is only valid if the price closes below the neckline. To calculate the predicted target price take the highest price in the head and subtract it from the neckline. This is the formation height. Subtract the formation height from the neckline to give you the predicted target price. There are variations to this pattern, not shown here, called "complex head and shoulders" patterns in which you may have multiple shoulders or heads or both.

Double Top.

A double top formation is also a very recognizable with two well defined peaks that are usually close in price. The duration of this pattern is usually several months. To calculate the predicted target price, first calculate the height of the formation by subtracting the lowest price (confirmation line) in the formation from the highest price in the formation. Then subtract the formation height from the lowest price or the confirmation line. The likelihood that price will pullback after a breakout are high so you could even wait until a pullback to place a trade.

Rectangular Top.

This pattern usually forms for about three months. Rectangular Tops can breakout in either direction. We will consider a breakout to the bottom, since this section is bearish reversal patterns. If a breakout is to the bottom, the predicted target price is calculated as follows. Subtract the upper trendline from the bottom trendline. Then subtract that value from the bottom trendline. The result is the predicted target price.