Inverse Head & Shoulders
The mirror image of Head & Shoulders — three troughs with a deeper middle low — marking selling pressure running out.
The bullish counterpart to Head & Shoulders, forming after a downtrend. Sellers push price to a low (left shoulder), it bounces, then a sharper final selloff reaches a deeper low (the head) before bouncing again — and a third attempt to break lower (right shoulder) fails to reach the head's depth.
The neckline here connects the two bounce highs. As with the regular version, the signal isn't the head — it's price finally closing back above that neckline, showing buyers have taken control from a market that just spent three attempts failing to make a new low.
The mirrored setup: many wait for a confirmed close above the neckline before acting, with a stop placed below the right shoulder's low — the level that would suggest the pattern failed if broken. The same head-to-neckline distance, projected upward from the breakout, is a commonly-used rough target, treated as a guideline for scaling out rather than an exact stopping point.
The mirror failure mode: a neckline break that doesn't hold, with price falling back below it and the downtrend resuming. A breakout on weak volume is generally read as less convincing than one on a real pickup in buying — and as always, no pattern is a guarantee, only a shift in probability.
- Same neckline-confirmation logic as the regular pattern, just mirrored — the breakout is above the neckline, not below it.
- Only meaningful after a genuine prior downtrend — it's marking exhausted selling, not creating a bottom out of nothing.
- The right shoulder not reaching the head's depth is the tell that each selling wave is weaker than the last.