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Inverse Head & Shoulders

Three troughs: left shoulder, deeper head, right shoulder; breakout above neckline signals bullish reversal.

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Inverse Head & Shoulders

Concept

A strong reversal pattern forming after a downtrend. Break above the neckline signals bullish continuation.

Trading Plan

  • Prior downtrend.
  • Head low below both shoulders.
  • Neckline connects swing highs.

Confirmation

  • Close above neckline.
  • Volume expansion on breakout.

Invalidation

  • Close back below neckline.
  • Lower low below right shoulder.

Targets

  • Target = Neckline + (Neckline - Head).

Measured move: Height = Neckline - Head; Target = Neckline + Height

Risk

Below right shoulder or neckline retest low.