I'm probably not the guy you want to listen to on this subject but, I do like to "mess around" with my cheap sewing machine to see what happens.
Here are a couple of ideas that will keep the thread going until someone that knows what they are talking about can chime in ...
You could try "gathering" the momentum along the seam as you sew which would basically supply more momentum length for stretch in the seam. And, use the zig-zag stitch, which allows for stretch in the thread of the seam.
Another option would be to sew the seam normally but of sufficient length so that the head piece would be the maximum size you would ever need. Then sew in a cord & cord-locks in the seam, so that you could cinch the hood down to a smaller size (or use elastic shock cord).
Sounds like you are working on a nice hood! Let us know how it comes out. Good luck!