Inverse Head and Shoulders
Also known as: Inverse H&S, Head & Shoulders Bottom
The mirrored H&S as a bottom reversal: three lows, the middle one (head) deeper than the shoulders. A break of the neckline upward turns the downtrend.
How it forms
After a downtrend, a first low forms (left shoulder), a lower low (head) and a higher third low (right shoulder). The highs between them form the neckline. Rising volume on the breakout supports the signal.
How it is typically traded
On a confirmed break above the neckline. Conservatively: wait for a retest of the neckline from above.
The distance from the head to the neckline, projected upward from the breakout point.
Below the right shoulder (or below the neckline after a retest).
Where & when – and the limits
Strongest at the end of a pronounced downtrend. Symmetry of the shoulders is a plus but not required. Only the neckline break makes it a signal.
Related patterns
Education, not investment advice. Chart patterns describe probabilities, not guarantees – they fail regularly. Always manage risk with stop-loss and position size.
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