Courses / Chart Patterns Masterclass

Inverse Head and Shoulders

The bullish mirror image: three troughs with the middle one lowest.

An inverse head and shoulders forms after a downtrend. It has three lows, the middle (the head) deeper than the two shoulders, with a neckline across the highs.

A close above the neckline confirms it. The target is the head-to-neckline distance projected upward. Rising volume on the breakout adds confidence.

Entry on the retest of the neckline reduces risk, with a stop below the right shoulder.

Key takeaways

• Bullish reversal after a downtrend
• Breakout above the neckline confirms
• Target = head depth projected up

Quiz

• An inverse head and shoulders is: Answer: Bullish. It signals a possible bullish reversal.
• Confirmation requires a close: Answer: Above the neckline. A close above the neckline.
• The stop for a long is below: Answer: The right shoulder. A break of the right shoulder fails the setup.

Educational content, not financial advice.