Inverse Head and Shoulders Pattern
Original schematic showing the guide's principal visual relationships.
Left shoulder → lower head → right shoulder; confirmation requires a close above the neckline.
Pattern anatomy
A three-trough bullish reversal structure with the deepest middle trough and a neckline above the rebounds.
Left shoulder → lower head → right shoulder; confirmation requires a close above the neckline.
How it works
Identify the prior trend first, mark repeated swing highs and lows, then draw only the support, resistance, or neckline justified by those pivots. A pattern remains provisional until price closes beyond its confirmation boundary; visual resemblance alone is not enough.
How to read it
The shallower right shoulder indicates sellers could not reproduce the head's low. The traditional objective projects the head-to-neckline depth upward from the breakout.
Practical example
Following a long decline, price makes a trough, a deeper trough, and a shallower third trough. A close above the neckline with stronger participation confirms the bullish reversal; a return below the right shoulder warns that demand has not taken control.
Confirmation checklist
Look for an established prior trend, a completed boundary break, and preferably expanding volume or momentum confirmation. A reversal pattern formed without a trend to reverse is weaker evidence.
Limitations and false signals
A neckline break inside a broad downtrend can be only a relief rally. Low volume and immediate closes back below the neckline weaken the setup.
Limitations and false signals
Frequently asked questions
What does this pattern or indicator describe?
A three-trough bullish reversal structure with the deepest middle trough and a neckline above the rebounds.
How should the signal be confirmed?
The shallower right shoulder indicates sellers could not reproduce the head's low. The traditional objective projects the head-to-neckline depth upward from the breakout. Look for an established prior trend, a completed boundary break, and preferably expanding volume or momentum confirmation. A reversal pattern formed without a trend to reverse is weaker evidence.
What can cause a false signal?
A neckline break inside a broad downtrend can be only a relief rally. Low volume and immediate closes back below the neckline weaken the setup.