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Inverted Head and Shoulders Pattern - Trend-Reversal-Patterns |
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Inverted Head and Shoulders Pattern
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The inverted head and shoulders pattern is found in candlestick, point and figure, and chart patterns and is considered one of the most reliable reversal patterns.
The price forms a low on column one, followed by a period of consolidation. A second low is created followed by another period of consolidation, the right shoulder is then formed followed by a buy signal as it crosses the neckline.
Parralel support and resistance lines can be drawn as well as a visible neckline.
The height of the lowest low should give a projection of the strength of the upward move.
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