Trading Strategy:'Inverted Head And Shoulder Pattern'

INVERTED HEAD AND SHOULDER

HIGHLIGHTS OF THE POST

®   WHAT IS HEAD & SHOULDER?

®   HEAD AND SHOULDER IN-DEPTH

®   CORE INDICATIONS

WHAT IS INVERTED HEAD & SHOULDER?

The Head and Shoulders Bottom sometimes mentioned as an Inverse/Inverted Head and Shoulders, is a reversal pattern that shares familiar characteristics with the Head and Shoulders Top, but depends more heavily on volume patterns for additional assurance. This type is a very strong trend reversal pattern. This candlestick pattern of head and shoulder is made of two zigzag patterns. It includes six waves in it. The role of volume marks the greatest disparity between the two forms of the pattern. In general, volume plays a larger role in bottom formations than top formations.

INVERTED HEAD AND SHOULDER IN-DEPTH

The Basic Inverted Head & Shoulder Pattern 

Without the proper extension of volume, the rationality of any breakout becomes suspect. Volume can be counted as an indicator. The high of 2^nd wave should be at higher place mainly below the high of wave ‘A’. The wave ‘C’ should be slightly flatter and choppy in the appearance. The wave ‘D’ should be steeper in comparison with wave ‘C’. The volume of wave ‘C’ should be stronger than all other waves. In this reversal pattern, the fifth wave shouldn’t retrace 78.6%. [Let me know your view about this statement in comment section below…..]

Some specifications of the first wave are as follow:-

Ø The initial and the most crucial requirement of this wave is that it should be sharp.

Ø The volume of this wave is greater than the other waves in the chart.

Ø We can see a rise in the volume near this wave which can’t be seen in case of other waves in the chart.

   CORE INDICATIONS

In this, we will see the three major aspects which are targets, entry, and stop-loss?

n  Targets: - In the above chart, there 3 targets that can be set through a progression view from the fourth wave to the third wave.

         First Target – 127.2%

        Second Target – 161.8%

        Third Target – 200%

n  Entry:- When the sixth wave progresses in the downward direction with super-trend indicator signals to initiate the trade. When the close of this wave is below the neckline at that time also trade can be initiated.

n  Stop-loss:-  While setting the stop-loss, the close should be below the neck-line. Here the neck-line is from third-wave to the fifth wave. When this condition/case is fulfilled at that time exit can be done.                                  

    For instance, in the current scenario, DIVI'S LAB  is the most reliable and suitable for the above concept.                                                                                                   

(In this chart, you can see how remarkable growth is made by this pattern)

If this blog post was helpful to you then please share it with your friends. All the best!! in advance to bag up exceptional stocks with the help of this pattern.    

To Read Further: - https://bit.ly/3d3yAUh

                              https://bit.ly/2AiPxeL