Inverse Head and Shoulders
Bullish Reversal AdvancedThe mirror image of the Head and Shoulders — three troughs where the middle one (head) is the deepest, flanked by two shallower troughs (shoulders). A break above the neckline confirms a powerful bullish reversal.
Quick Summary
- • What it looks like: Three troughs — left shoulder, a deeper head, and a right shoulder roughly equal to the left. A neckline connects the peaks between the troughs.
- • What it means: Sellers pushed to a new low (head) but couldn't hold it. The right shoulder's higher low shows selling pressure is fading and buyers are stepping in.
- • When it confirms: When price breaks above the neckline after forming the right shoulder. Volume should surge on the breakout.
What It Looks Like
The Story Behind the Pattern
Left shoulder — downtrend continues
Price drops to a new low. Bears are in control. A modest bounce follows but fails to excite buyers.
Head — capitulation
Price plunges to an even lower low on heavy volume. This is the panic selling climax. But the sharp bounce that follows hints that sellers may be exhausted.
Right shoulder — higher low
The next decline doesn't reach the head's low. This higher low is the critical signal — selling pressure is weakening. Buyers are building a base.
Neckline break — the reversal
Price surges above the neckline on strong volume. Short sellers cover, new buyers enter, and the trend flips bullish.
How to Trade the Inverse H&S
Spot the Higher Low
The right shoulder making a higher low than the head is your first clue. Start watching the neckline closely.
Buy the Neckline Breakout
Enter when price closes above the neckline on above-average volume. This is the lowest-risk entry point with the clearest confirmation.
Measure the Target
Distance from head to neckline, projected upward. If the head is at $20 and neckline at $30, target is $40.
Stop Below Right Shoulder
If the pattern fails, price drops below the right shoulder. Place your stop there to limit downside.
Technical Details
| Pattern Name | Inverse Head and Shoulders |
| Pattern Type | Reversal (Bullish) |
| Formation | Three troughs — middle (head) deepest, two shoulders shallower |
| Confirmation | Price breaks above the neckline |
| Price Target | Head-to-neckline distance projected above breakout |
| Timeframe | Weeks to months (daily chart) |
| Reliability | Very High — bullish mirror of the most reliable reversal pattern |
| Volume | Should increase on the neckline breakout |
Remember: Inverse Head and Shoulders patterns that form after extended downtrends tend to be more reliable. The pattern needs a prior trend to reverse — without it, you might be looking at a trading range.
Recent Detections
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