An inverted head and shoulders is a “bottoming” or bullish formation which may occur toward the bottom of a long decline. The picture is the opposite of a head and shoulders top, featuring a left shoulder decline, then a rally, then a sharper decline forming the “Upside-down Head” which depicts the final bottom of a long decline. The right shoulder follows, then an acceleration in upward direction leaving the sillowet of a person standing up-side down. Higher volume should occur on the rallies whereas volume should drop during price declines in order to confirm this formation.
Walt Breitinger, Paragon Investments, Inc.
DBA Breitinger & Sons, Commodity Futures Brokers