Reversal pattern · bullish bias
Inverse Head and Shoulders pattern
An inverse head and shoulders is the bullish mirror of the classic pattern: three troughs after a downtrend, with the middle one (the head) the deepest, capped by a neckline that price needs to break upwards.
How to identify a inverse head and shoulders
- A downtrend leads into the structure.
- Left shoulder: a swing low followed by a bounce.
- Head: a deeper low that recovers to roughly the same area as the first bounce.
- Right shoulder: a shallower low, roughly level with the left shoulder.
- Neckline: the line drawn through the two bounce highs.
What confirms it
The pattern completes on a close above the neckline. A retest of the neckline from above that holds as support is a common second confirmation.
What invalidates it
A close below the right shoulder low suggests sellers are still in control and the reversal has failed.
How traders project a target
Measure from the bottom of the head to the neckline and add that distance to the breakout point to get the usual projection area.
Common mistakes
- Buying the right shoulder before any neckline break and treating it as confirmed.
- Drawing a neckline that cuts through candle bodies just to make the pattern fit.
- Ignoring a higher-timeframe downtrend that the pattern is fighting against.
Where it appears
Most meaningful after an extended decline. Inside a sideways range it is often just noise.
Frequently asked questions
What does an inverse head and shoulders tell you?
It suggests selling pressure is weakening: the market made a deeper low, could not follow through, and then failed to revisit that low. The neckline break is where that read is confirmed.
Does the neckline have to be horizontal?
No. It can slope up or down. A downward-sloping neckline is easier to break but the move may be weaker; a rising one is harder to break but signals buyers already stepping up.
Where do traders usually place invalidation?
Commonly below the right shoulder low. A deeper invalidation below the head gives more room but a worse distance to the target.
Related chart patterns
Educational content only, not financial advice. Chart patterns describe probabilities, not certainties, and every pattern can fail. See our disclaimer.