What is an Inverted Head and Shoulders?
Inverted Head and Shoulders Definition:
In Technical Analysis, an inverted or inverse head and shoulders is generally considered as bullish reversal chart pattern that is found at the bottom of a downtrend. Here, the price fails to reach the low of the second trough after already marking two consecutive lows. Often, the peaks between the troughs are more or less at the same level. Sometimes, though, the line that connects the two peaks or the “neckline” can either be upward or downward sloping rather than horizontal. In some cases, inverted or inverse head and shoulders can also be seen as a bullish continuation pattern that is found within an uptrend. In both instances, an upside breakout occurs when the price moves above the pattern’s neckline. A target is then gauged by projecting the height of the head from its neckline from the point of breakout.