Reverse Head and Shoulders Pattern

The reverse head and shoulders — also called an inverse head and shoulders — is the bottoming version: a low, a lower low, then a higher low, under a neckline drawn across the two intervening peaks.

The logic runs the same way inverted. Sellers drive a low, then a deeper one, then cannot manage a third. The failure to make a lower low, right after making one, is what says the selling pressure is exhausted rather than merely paused.

Why This One Suits Penny Stocks Better

Bottoming patterns are generally more reliable here than topping patterns, for a structural reason: a stock that has already fallen 80% has far less left to liquidate. Forced sellers — margin calls, fund redemptions, converting noteholders — eventually run out of shares, and the higher low is often the first visible sign that they have.

Confirmation is the break up through the neckline, ideally on expanding volume. These setups tend to surface on the reversals scan and the accumulation scan around the time the right shoulder forms — volume building while price stays flat is exactly what accumulation looks like on an indicator.

What to Watch For

• Low, lower low, higher low — selling pressure exhausting.
• Confirmed by the break up through the neckline, ideally on expanding volume.
• More reliable than the topping version here: forced sellers eventually run out of shares.
• The right shoulder often coincides with volume building while price stays flat.

Scans That Use This

• Penny stock reversals
• Penny stocks under accumulation
• Top bullish penny stocks

Chart Patterns

• What Are Chart Patterns?
• Symmetrical Triangle Pattern
• Ascending Triangle Pattern
• Descending Triangle Pattern
• Double Top Pattern
• Double Bottom Pattern
• Head and Shoulders Pattern
• Reverse Head and Shoulders Pattern

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