Chart patterns
Inverse head and shoulders
The inverse head and shoulders is a bullish reversal pattern: three troughs, the middle one lowest, often signalling a rise.
The inverse head and shoulders is a bullish reversal pattern: three troughs, the middle one lowest, often signalling a rise.
It is the mirror of head and shoulders, flipped and after a decline. Price makes a first trough (shoulder), rises, makes a lower trough (the head), rises, then a higher third trough (shoulder). The neckline joins the two peaks.
The bullish signal confirms when price breaks above the neckline. It is one of the most watched reversal patterns to spot the end of a downtrend.
After a drop, price forms a trough at $20, a lower trough at $17, a trough at $20, neckline near $24. A break above $24 confirms the bullish reversal.
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