Head and Shoulders Bottom

Head and Shoulders Bottom (Reversal)
The Head and Shoulders bottom is referred to sometimes as an Inverse Head and Shoulders.

Head and Shoulders Bottom
Head and Shoulders Bottom or Inverse Head and Shoulders is the opposite of Head and Shoulders Top and is formed in a downtrend when a lower low is followed by a higher low.

Head and Shoulders Bottom: A bullish reversal pattern marked by three (or more) prominent troughs with a middle trough (the head) that is lower than the other troughs (the shoulders).

Head and Shoulders Bottom
Classic Pattern
Implication
Description
Variations of the Head and Shoulders Bottom
Important Characteristics
Trading Considerations
Criteria that Support
Criteria that Refute ...

Head and Shoulders Bottom Reversal Pattern
Mirroring the head and shoulders top reversal pattern gives a head and shoulders bottom reversal pattern.

The head and shoulders bottom marks a reversal in a downward trend in a stock's price. While volume is important to a head and shoulders top, it is absolutely crucial to a head and shoulders bottom.

The next example is showing an Inverted Head and Shoulders bottom:
Notice that this is still a reversal pattern. The trend prior to the pattern was down, then the pattern formed, and then a reversal in the trend begins into an uptrend.

Volume tends to decline throughout this formation. This is one of the most authoritative and common distribution formations. A head and shoulders bottom formation follows the same pattern in a mirror reverse (an authoritative accumulation pattern).

Head and Shoulders: A pattern that has three peaks resembling a head and two shoulders. A head and shoulders top typically forms after a substantial rise and indicates a market reversal. A head and shoulders bottom ...

Three Rising Valleys
Rounding Bottoms (tied with 6)
Descending Triangles
Ascending Broadening Wedges (tied with 8)
Eve & Eve Double Bottoms
Triple Bottoms (tied with 10)
Head and Shoulders Bottoms ...

a support level, a rally to a higher price than the previous high price, a second decline to the support level, and a weaker rally to about the level of the first high price. The reverse (upside-down) formation is called a head and shoulders bottom ...

A head and shoulders bottom pattern signifies the reversal of a downward trend--prices should be rising.

See also: Head and Shoulders, Reversal, Chart, Support, Pattern