Another trend reversal chart is the Inverse Head and Shoulders stock chart pattern, which indicates a movement towards a bullish trend and an excellent indicator of when to invest for those who know how to look for it. Very similar in look to that of a “triple bottom,” with the only exception being that the “head” dips lower than other two points giving it the head a shoulders formation.

inverse head and shoulders

As with the traditional inverse head and shoulders pattern, which indicates a move towards bearish territory, this pattern is the exact opposite. This pattern, however, is also able to tell you a few things you might want to know that its counterpart doesn’t. For instance, this pattern can indicate how strong a bullish run will be if you read it right.

If you look at the chart stretch coming before the formation of the head and shoulders pattern, a longer stretch can be an indication of a stronger bull movement, while shorter ones might mean you should get in and out quick before the bull turns back to bear. Also, if the lead into the head and shoulders pattern happens suddenly, then this can also indicate a stronger bullish trend.

Head and shoulder patterns with a neckline that moves downward can also indicate an overall better performance than one without this movement. Also, if the pattern has a higher “left shoulder,” then it can also mean that the pattern will perform better than those with a higher “right shoulder.”

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ChrisDouthit
ChrisDouthit

The founder of OptionStrateigesInsider.com has a long history with options and an extensive education in finance. Holding an MBA and multiple finance degrees, Chris has put in the time and effort to learning the market fundamentals.