Inverse head and shoulders
Three lows in a row where the middle one is the lowest, with a line over the two bounces between them.
What it shows
The pattern has a left shoulder, a lower head and a right shoulder that is about as low as the left one. A line through the two highs between the lows is the neckline.
It appears after a fall and describes sellers failing to make a lower low. It is complete only when price closes above the neckline.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find three swing lows in order, where the middle one is the lowest.
- Require the two outer lows to be within 15% of each other in depth.
- Draw the neckline through the two swing highs between the lows.
- Mark the pattern complete when a close rises above the neckline by more than the margin.
Starting values: Shoulder match within 15%; Minimum head below shoulders 3% of price; Margin above neckline 1.0%. These are proposed and will be tuned on real price data before launch.
How to read it
- Teal dots are the three lows.
- The blue line is the neckline.
- Volume is often described as rising on the move above the neckline.
Status labels you may see
| Label | What it means |
|---|---|
| Forming | Three lows found, neckline not broken. |
| Testing the neckline | Close within 2% below the neckline. |
| Neckline broken | Close above the neckline. |
What cancels it
A close below the right shoulder's low before the neckline breaks.
What traders check next
- Whether the neckline was broken by a close or only a wick.
- Volume on the break.
- Whether price returned to the neckline after the break.
Limits
- Many shapes never break the neckline.
- The rules decide what counts as equal shoulders.
- It is clearer in hindsight than in real time.
Try it in forecastviz
- Open any ticker and choose Reversal patterns → Inverse head and shoulders in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Head and shoulders and Double bottom on the same chart.
Questions
Is it the mirror image of head and shoulders?
Yes. The pattern is turned upside down.
Where is the neckline?
Over the two bounces between the three lows.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- Murphy, Technical Analysis of the Financial Markets
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.