Inverse Head and Shoulders
Also called: head and shoulders bottom
A bullish bottoming pattern — three troughs with a deeper middle one — that breaks out above the neckline to signal a reversal up.
The inverse head and shoulders is the upside-down version of the topping pattern: a left shoulder, a deeper head, and a higher right shoulder, all under a neckline of resistance. It marks a downtrend losing strength and a base forming.
A close above the neckline on rising volume confirms it, with the distance from the head to the neckline projected up as the target. A right shoulder that holds above the head is the textbook tell.
On StockSetups
The bullish inverse head and shoulders is the version that surfaces as a tradable setup on StockSetups' long-only board, with the neckline breakout drawn for you.
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