As part of articles series about Technical Analysis ,Reverse I'll explain Head And Shoulders Pattern
I talked in previous articles about
Reverse Head And Shoulders Pattern
This pattern looks like the previous pattern except that reverse head and shoulders pattern comes at the end of down trend and that mean the market has stopped about the selling and started new level , and this pattern consists of the same way but it expects the buying after the formation of reverse right shoulder
The Components of Reverse Head And Shoulders Pattern
The Reverse Left Shoulder -
The Reverse Head -
The Reverse Right Shoulder -
The Resistance Line -
Reverse Head And Shoulders Pattern
The Reverse Left Shoulder
The Market looks forward to test the lowest levels and here the reverse left shoulder consists
The Reverse Head
After that the price tests the lowest levels for the second time and in this time it succeeds in reaching to low levels lower than the reverse left shoulder level , this new low level is the reverse head and notice that the price remains traded under the resistance line and unable to break it to high
The Reverse Right Shoulder
After that the price tries to fall down for a third time but it fails achieving low levels lower than the reverse head area and here the third level consists ,this reverse right shoulder levels
After that at this time we notice that the price will be able to break the resistance line and the price will raise upward and looks forward to search about new high levels
The Resistance Line
The Resistance Line is a line has been drawn depending on connecting the highest levels with each other ,this resistance line pressing on the prices and send it to down
If you see this pattern on the chart you must close all selling deals and get ready to buy deals when the prices break the resistance line
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