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Inverse Head and Shoulders Pattern

The inverse head and shoulders is a bullish reversal pattern that forms at the end of a downtrend. It's the mirror image of the standard head and shoulders, consisting of three troughs — a deeper middle trough (head) flanked by two shallower troughs (shoulders). The pattern signals that selling pressure is exhausting and buyers are stepping in.

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Key Characteristics

Left shoulder: First trough followed by a rally

Head: Deeper trough, the lowest point in the pattern

Right shoulder: Third trough, similar depth to left shoulder

Neckline: Resistance line connecting the highs between troughs

Volume: Often increases on the right shoulder and breakout

Breakout: Price closes above the neckline

Measured move: Target equals head-to-neckline distance projected upward

Confirmation: Volume surge on neckline breakout

Trading Tips

✓Wait for the neckline breakout with volume confirmation
✓Set stop-loss below the right shoulder
✓Target is the distance from head to neckline, projected above the breakout
✓Retests of the neckline as new support offer additional entry points

Signal Strength & Reliability

Strong — one of the most reliable bullish reversal patterns

Inverse Head and Shoulders FAQs

Common questions about the inverse head and shoulders pattern

The inverse head and shoulders is considered one of the most reliable bullish reversal patterns, with historical success rates of 70-80% when volume confirms the breakout. However, no pattern works 100% of the time.

The pattern can form over weeks, months, or even years depending on the timeframe. On daily charts, it typically takes 1-6 months to complete. The longer the formation period, the more significant the potential reversal.

A slightly downward-sloping neckline is common and still valid. A significantly sloping neckline may indicate the pattern is less reliable. Horizontal or slightly upward-sloping necklines tend to produce stronger breakouts.

Inverse Head and Shoulders Pattern

Identify Inverse Head and Shoulders Patterns with AI

Key Characteristics

Trading Tips

Signal Strength & Reliability

Inverse Head and Shoulders FAQs

How reliable is the inverse head and shoulders pattern?

How long does the inverse head and shoulders take to form?

What if the neckline is sloping?

Related Patterns

Head and Shoulders

Double Bottom

Rounding Bottom (Saucer)

All Chart Patterns

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