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If the user has a status ailment, and the target does not, then that status ailment is transferred to the target, curing the user and inflicting the target with the status. Does not transfer temporary status such as confusion. If the user does not have a status, the target already has a status, or the target is not susceptible to the user's status, the move will fail. If the target has an ability that activates in response to the status, then the Psycho Shift user is only cured after that ability has been activated. Psycho Shift does not activate the ability Synchronize.
Psycho Shift is a very unfortunate move, requiring the user to have the same status that it wants to inflict on its opponent. Using a status orb is almost required to use this move with any consistent amount of effectiveness. Cresselia can use its massive bulk to spread burns in this way, but it is pretty pointless to use this convoluted tactic when so many other Pokemon have Will-O-Wisp. However, Sigilyph can use Psycho Shift very effectively due to Magic Guard protecting it from burn and poison damage from Flame Orb and Toxic Orb. It uses Psycho Shift to burn physical attackers, rendering them helpless as it sets up using Calm Mind or Cosmic Power.