indices looks hot these days The inverse head and shoulders chart pattern is a bullish chart formation that signals a potential reversal of a downtrend. It is the opposite of the head and shoulders chart pattern, which is a bearish formation.2
The inverse head and shoulders chart pattern consists of three (3) troughs: the first and third troughs are roughly equal in depth and are known as "shoulders", while the second trough is deeper and is called the "head".
A Description of the Inverse Head and Shoulders Chart Pattern
This chart pattern formation is commonly used in technical analysis to predict the reversal of a downtrend. It is a bullish signal that is essentially the reverse of the regular head and shoulders chart pattern, which is a bearish indicator. The structure of the inverse head and shoulders chart pattern is described as follows:
Left Shoulder: After a downtrend, the price of the respective asset makes a low and then rallies to a higher point, forming the left shoulder.
Head: Following the formation of the left shoulder, the price declines to a point lower than the left shoulder and then rallies again, forming the head.
Right Shoulder: Finally, the price declines again but not as low as the previous decline or the head, and then rallies one more time, forming the right shoulder. The right shoulder is typically roughly equal in depth to the left shoulder.
Neckline: A trendline is drawn connecting the high points (or "peaks") after the formation of each shoulder and the head. This line serves as a level of resistance that the price must break through to confirm the pattern.
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but Stops below 6935 on DCB and target 7900 looks achievable on 1D timeframe, which is 1:3 RR.
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