What is a head and shoulders bottom?

The Head and Shoulders Bottom, sometimes referred to as an Inverse Head and Shoulders, is a reversal pattern that shares many common characteristics with the Head and Shoulders Top, but relies more heavily on volume patterns for confirmation.

When is a head and shoulders bottom pattern complete?

Neckline Break: The Head and Shoulders Bottom pattern is not complete (and the downtrend is not reversed) until neckline resistance is broken. For a Head and Shoulders Bottom, this must occur in a convincing manner, with an expansion of volume.

What is the Head & Shoulders (H&S) bottom reversal pattern?

The Head and Shoulders Pattern is historically considered to be one of the most reliable major reversal patterns in technical analysis. In today’s lesson, we will focus on the characteristics of the Head & Shoulders (H&S) Bottom, as well as the minimum price objective after a breakout, and stop-loss levels.

What does inverse head and shoulders mean?

When the price breaks through the neckline, after forming the right shoulder, and keeps continuously falling, indicating the completion of the head and shoulders top formation. The head and shoulders pattern can also form in the opposite direction. This is known as the head and shoulders bottom or the inverse head and shoulders.