Bullish
Pattern
type
Apr 16, 2018
Emerged on
Apr 18, 2018
Pattern confirmed

Statistics

since January 2000

20143

TOTAL # OF PATTERNS

62.44%

CORRECT PREDICTIONS

Calculated by A.I. for all supported tickers and confirmed Head-and-Shoulders Bottom patterns

• with confidence above 40 %
• with distance to target price above 5 %
 

Head-and-Shoulders Bottom

— — — BR — Breakout line      — — — TR — Target line
pattern image

Head-and-Shoulders Bottom pattern

Head-and-Shoulders Bottom

The Head-­and-­Shoulders Bottom pattern is formed when the price of a security creates a center trough (the inverted head, labeled 3) and the left and right inverted shoulders (1, 5). As you can see, this pattern is vertically symmetrical to the usual Head­-and-­Shoulders pattern and is formed when a security is testing new lows on a downtrend. After reaching the lowest low (the Head, 3) the next low is shallower and the trend reverses course to the upside.

This type of formation happens when investors create a minimum support level for the price of a security, and ultimately trading consolidates into an UP trend.

Trading Idea

Once the security price breaks out from the top pattern boundary (the neckline), day traders and swing traders should trade with an UP trend. Consider buying the security or a call option at the low once the pattern is confirmed, which is known as the breakout point. The pattern is confirmed when the price breaks above the Neckline (2,4). To identify an exit, compute the target price level by adding pattern height (the distance between the head (3) and the Neckline (2, 4)) to the neckline price level.

To limit potential loss when price suddenly goes in the wrong direction, consider placing a stop order to sell at or below the breakout price.

Powered by Pattern Search Engine

Our A.I. searches over 4000 stocks, 1000 ETFs and hundreds of cryptocurrencies every day to identify 37 pattern types.
For every pattern it provides:


 
  • Confidence level
  • Statistics
    Success rate
    Gains & Losses (for this ticker/pattern type)
 
  • Breakout price
  • Target price
  • Interactive chart
TRY FOR FREE

OR

Want to unlock this ticker?

Buy it in MALL