Power of Inverted Head and Shoulder Pattern

I had posted this analysis on 25th June and see how well the price action worked in this case.

After breaking out of Neckline 2 of inverted head and shoulder pattern 2 the stock moved up the same depth as that of shoulder 2.

After that there was a perfect pullback and continuation to complete our Inverted head and shoulder pattern 1.

The first estimated target was the depth of shoulder 1. That target has been achieved in 10 trading sessions. Typically in these patterns the main target is set to the depth of head.

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My original idea was as below:


(We can see perfect price action for Inverted head & shoulder pattern here.

The price made shoulder 1 and moved down to form complete inverted head & shoulder pattern 2.

It gave a breakout with shoulder 2 target met in confluence with neckline of pattern 1.

Then proper pullback and continuation is seen to neckline 2 and then back to neckline 1 completing our pattern 1.

Now it has given a breakout and looks good above 1075 level for a positional target of 1172.)

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Price action is one of the best techniques to take intraday and swing trades.

Once you understand the basics of chart patterns and how to set your targets and stop loss, you can book decent returns on your capital.

Learn & Earn,

Dr. Tanya Kumar