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Everything about Inverse Head and Shoulder Pattern
Free Technical Analysis course (5/10) π§΅
Everything about Inverse Head and Shoulder Pattern
Free Technical Analysis course (5/10) π§΅
An inverse head and shoulders is similar to the standard head and shoulders pattern, but inverted. It may be used to predict reversals in downtrends. β’ Investors typically enter into a long position when the price rises above the resistance of the neckline.
How do we trade the Inverse H&S pattern?
We find out stock that has the pattern but has not given a breakout above the resistance which means it is in the formation of the right shoulder.
Generally, we track the stock just before the breakout so that we don't miss a big move.
We find out stock that has the pattern but has not given a breakout above the resistance which means it is in the formation of the right shoulder.
Generally, we track the stock just before the breakout so that we don't miss a big move.
What does this mean?
Basically, we look out for the charts where the price is forming the right shoulder or consolidating just below the resistance.
As seen in the chart where the price was in consolidation just below the resistance before the breakout and big upmove.
Basically, we look out for the charts where the price is forming the right shoulder or consolidating just below the resistance.
As seen in the chart where the price was in consolidation just below the resistance before the breakout and big upmove.
Now the most important question is how we trade this pattern.
1. First identify stocks that are forming the Inverse H&S pattern and are about to give a breakdown.
2. Stoploss would be the nearest swing low or right shoulder low.
1. First identify stocks that are forming the Inverse H&S pattern and are about to give a breakdown.
2. Stoploss would be the nearest swing low or right shoulder low.
3. How to set a target?
Just calculate the height of the shoulder and then head from the resistance to the bottom. Add that much depth above the support to get the first target and second targets.
Let's see a trade with a live example:
Just calculate the height of the shoulder and then head from the resistance to the bottom. Add that much depth above the support to get the first target and second targets.
Let's see a trade with a live example:
In the Astral Trade, an Inverse H&S pattern has formed.
Some consolidation can be seen just below resistance, which can be the buying point at 950.
The previous swing low at 799 is the stoploss for long.
A target of 1613 was calculated which got hit.
A decent R:R trade.
Some consolidation can be seen just below resistance, which can be the buying point at 950.
The previous swing low at 799 is the stoploss for long.
A target of 1613 was calculated which got hit.
A decent R:R trade.
That's all about Head and Shoulder Technical chart patterns.
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