In the case of a bullish Head and Shoulders reversal pattern, the official name changes to Inverse Head and Shoulders, meaning “the opposite”.
Allow us to clarify through an example!
The Inverse Head and Shoulders, is made up of three bottoms. The middle one is called the head, the bottom to the left is known as the left shoulder, and the bottom to the right resembles the right shoulder.
Additionally, there are two corrections in this case as well, that form the corresponding two tops.
The line connecting the two tops is called the neckline. A decisive breach of the neckline completes the Inverse Head and Shoulders pattern and opens the way for a new trend to the upside.
It’s basically like the bearish one but upside down!
So far so good, yes? Awesome!
Now, for a reversal pattern to exist, first there has to be an established trend. In this case, since we’re looking at a downtrend, we need a sequence of successive lower tops and lower bottoms.
Of course, some trends are longer than others, but as a minimum prerequisite for a downtrend to exist, at least two consecutive lower tops and lower bottoms are required and the price to drop below the second bottom.
Remember: If there’s no trend, there’s no reversal!
Now you know what an Inverse Head and Shoulders reversal pattern is!
Copyright © 2025 – All rights reserved.
NAGA is a trademark of The NAGA Group AG, a German based FinTech company publicly listed on the Frankfurt Stock Exchange | WKN: A161NR | ISIN: DE000A161NR7.
The website is operated by KEY WAY MARKETS LTD a Company limited by shares that is formed and registered under the Laws of the Abu Dhabi Global Market (“ADGM”) under license number 000003041, authorized and regulated by the Financial Services Regulatory Authority (“FSRA”) with Financial Services Permission Number 190005, having its registered offices at Office 2, 21st Floor, Al Sila Tower, ADGM Square, Al Maryah Island, Abu Dhabi, United Arab Emirates (“the Company”).
The Company is authorized to provide financial products and services to Retail Clients and to persons who meet the qualifying criteria of a Professional Client as defined in the ADGM Conduct of Business Module. Partner Company: NAGA Markets Europe Ltd, authorized and regulated by the Cyprus Securities and Exchange Commission ("CySEC") under license No. 204/13 with registered address at Agias Zonis 11, Limassol, 3027, Cyprus.
RISK WARNING: Trading leveraged products (CFDs) and real shares involves significant risk, including the potential loss of your initial investment, and may not be suitable for all investors. Before trading or investing, you are strongly advised to read and ensure you understand the relevant Risk Disclosure and warnings included in the Company's legal documents section. There is a substantial risk that you may lose all of your initial investment when trading or investing. We recommend that you carefully consider whether trading leveraged products or investing in shares is appropriate for you in light of your personal circumstances, and ensure you fully understand all associated risks before proceeding. 24.46% of retail investor accounts generate profits when trading leveraged products with this provider. Trading with NAGA Trader by following and/or copying or replicating the trades of other traders involves high levels of risks, even when following and/or copying or replicating the top-performing traders. Such risks include the risk that you may be following/copying the trading decisions of possibly inexperienced/unprofessional traders, or traders whose ultimate purpose or intention, or financial status may differ from yours. Before making an investment decision, you should rely on your own assessment of the person making the trading decisions and the terms of all the legal documentation.
Disclaimer: The content on this page is for informational purposes only and is not intended as a recommendation or advice. Any references to past performance, emulated performance, or forecasts in the Company’s advertisements are not reliable indicators of future results. Customers are solely responsible for their own business decisions or investments.