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Inverted Head and Shoulder indicates Accumulation scenario.
It is up side down of normal Head and shoulder pattern.
It should take each minimum one month for left, right shoulders and head i.e., 3 months to form the pattern.
Volume should be high in Left shoulder and low in Right shoulder.
When price breaks the neck line, long position can be created.
It is a accumulation pattern, 2 shoulders , a head (at lowest price ) and a neck line (seller’s zone )formed in the down side is known as inverted head and shoulder pattern. it is formed at the low of an downward movement and signals that the downward trend is about to end.
This pattern indicates that the stronger hands have started accumulating the stocks for some reason and the price will raise.
Conditions for bullish trend :
duration of the pattern is main 3 months
Create long position when the price breaks the neck line.
This formation is simply the inverse of a Head and Shoulders Top and often indicates a change in the trend.
Investors enter into a long position when the price rises above the resistance of the neckline.
Inverted head and shoulder is also called head and shoulder bottom.
Conditions:
*There should be an major down trend before this pattern.
*left shoulder volume highest indicating the selling pressure.
*head with high volume.
*right shoulder with reasonable volume and also after the neckline.
*long positions to be considered
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