Chartfilter - Technical Analysis Education

The inverted head and shoulders pattern is found in candlestick, point and figure, and chart patterns and is considered one of the most reliable reversal patterns.

The price forms a low on column one, followed by a period of consolidation. A second low is created followed by another period of consolidation, the right shoulder is then formed followed by a buy signal as it crosses the neckline.

Parralel support and resistance lines can be drawn as well as a visible neckline.

The height of the lowest low should give a projection of the strength of the upward move.