What is a head and Shoulders pattern?

The head and shoulders is a pattern used by traders to identify price reversals. A bearish head and shouders has three peaks, with the middle one reaching higher than the other two. It indicates a reversal of an upward trend. A bullish head and shoulders has three troughs, with the middle one reaching lower than the other two.

What is a head and shoulders reversal pattern?

A head and shoulders pattern—considered one of the most reliable trend reversal patterns—is a chart formation that predicts a bullish-to-bearish trend reversal. An inverse head and shoulders pattern predicts a bearish-to-bullish trend. The neckline rests at the support or resistance lines, depending on the pattern direction.

What is inverse head and Shoulders pattern?

An inverse head and shoulders, also called a "head and shoulders bottom," is similar to the standard head and shoulders pattern but inverted, with the head and shoulders top used to predict reversals in downtrends. It is a bearish-to-bullish indicator. What Is the Opposite of a Head and Shoulders Pattern?

What is the opposite of a head and shoulders chart?

The opposite of a head and shoulders chart is the inverse head and shoulders, also called a head and shoulders bottom. It is inverted with the head and shoulders bottoms used to predict reversals in downtrends. This pattern is identified when the price action of a security meets the following characteristics: