We are what we think; all that we are, arises with our thoughts; with our thoughts, we make the world.

This a head and shoulders formation, except it is upside down. A valley is formed (shoulder), followed by an even lower valley (head), and then another higher valley (shoulder). These formations occur after extended downward movements.

Reverse Head and Shoulders

With this formation, we would place a long entry order above the neckline. Our target is calculated just like the head and shoulders pattern. Measure the distance between the head and the neckline, and that is approximately the distance that the price will move after it breaks the neckline.

You can see that the price moved up nicely after it broke the neckline. Reverse Head and Shoulders Completed

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