Price patterns are formations which appear on stock charts which have shown to have a certain degree of predictive value. Some of the most common patterns include: head & shoulder (bearish), inverse head & shoulder (bullish), double top (bearish), bouble bottom (bullish), triangles, flags and pennants (can be bullish or bearish depending on the prevailing trend).
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Hi,
The inverted head and shoulder pattern is the reverse of the head and shoulder pattern. It’s formed at the bottom of the downtrend. It has three bottoms that look like three V’s. They’re called the left shoulder, head, and right shoulder.
Left shoulder – In the left shoulder, price falls and rises to the neckline to form a V shape.
Head – In the head, price falls and rises to the neckline to form a bigger V shape bottom.
Right shoulder – The right shoulder is similar to the left shoulder.
In this pattern, a breakout above the neckline will result in an uptrend.