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Tagged: INVERTED HEAD AND SHOULDER
Inverted Head and Shoulder pattern appears in a stock price movement when two equivalent bottoms are identified along with a significantly lower bottom between them. This happens when a strong hand tends to accumulate a stock in a short period.
Conditions:
(Head appears because a stronger hand cannot buy all the stocks at once. They have to sell sometimes in order for them to buy the stocks.)
Long position can be created when the price crosses the neckline.
The Inverted Head and Shoulder Pattern indicates the Accumulation, The head should be the highest amount the recent price action.
Generally the volume during the L.Shoulder should be highest, duration form the pattern Shoulder, Head, Shoulder is minimum 1 month, R. Shoulder volume should be as low as possible, Short position can be considered while breaking down the neck line.
3 bottom with center bottom more deep and each shoulder has 1 month gap.
Left bottom has highest of volumes and 2nd bottom has lowest volume
Bullish trend is determined in the price cutting the neck region
left should volume should be low and right shoulder volume should be high and it should take min 3 months to form this. create long position when the right shoulder crosses the left shoulders top.
This depicts bullish trend reversal.
An accumulation pattern.
2 inverted shoulders with a taller inverted head in between.
3 months time .
Higher volume at the left shoulder and low volume at the right shoulder.
Create long position if the price goes higher than the the neckline.
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