The Inverse Head and Shoulder pattern

I have seen a few of these patterns formed (or forming) today while doing some chart review work so I thought I would highlight one here. I bring you the Weekly chart of $VNQ:

Based on the pattern formation of the Right Shoulder, the target would be in the $67.5 price level for a test of the neckline. Bullish Engulfing for this past week is one good-looking candle and increases the probability of this trade setup.

 

2 thoughts on “The Inverse Head and Shoulder pattern

  1. As is the case with every pattern, their is a degree of probability to consider. As for unreliable, it really does depend on what your approach is.
    In your view, you say this is an unreliable pattern, so you would short the neckline test right?
    I see nothing wrong with that view btw. Nothing wrong at all.
    As for me and my stop, it is only relevant to my trading process and will made at the time I put on a trade, if ever.
    For the record, I use Trailing Stops and Option Collars to protect positions.

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