The inverted head and shoulders pattern is a reversal pattern often observed in technical analysis. It typically indicates a trend reversal from a downtrend to an uptrend and consists of three troughs with the middle trough (head) being lower than the other two (shoulders).
Connecting the highs between the troughs (shoulders) forms a neckline. The confirmation of the pattern occurs when the price breaks above this neckline, signaling a potential trend reversal. Traders often look for increased volume when this breakout occurs to further confirm the validity of the pattern.