Inverse Head and Shoulders Pattern
A bullish reversal pattern forming after a downtrend, with three troughs where the middle trough is lowest, signaling a trend reversal from bearish to bullish.
Quick Answer
A bullish reversal pattern forming after a downtrend, with three troughs where the middle trough is lowest, signaling a trend reversal from bearish to bullish.
What Is the Inverse Head and Shoulders Pattern?
The Inverse Head and Shoulders (also called Head and Shoulders Bottom) is the bullish counterpart to the Head and Shoulders pattern. It forms at the end of a downtrend with three lows: left shoulder, a lower head, and right shoulder. A break above the neckline confirms the bullish reversal.
How the Inverse Head and Shoulders Forms
- 1Price makes a low (left shoulder) then bounces
- 2Price drops to a lower low (head) then bounces to neckline
- 3Price drops but holds above the head (right shoulder)
- 4Price breaks above the neckline to confirm
How to Confirm the Pattern
Price Target Calculation
Measure the distance from the head to the neckline, then project that distance upward from the neckline break point.
Best Timeframes for Inverse Head and Shoulders
How to Trade the Inverse Head and Shoulders
- →Identify major bullish reversals
- →Set price targets for long positions
- →Determine stop-loss levels below right shoulder
- →Time entries on neckline break or retest
Common Mistakes to Avoid
Detect Inverse Head and Shoulders Automatically
VaultCharts automatically detects Inverse Head and Shoulders patterns on your charts. No manual analysis needed - the pattern is highlighted with entry zones and targets.