A Bullish Inverted Head and Shoulders pattern is one of the most accurate patterns you can trade. The pattern consists of a left shoulder, head, right shoulder, and neckline. The neckline does not have to slant up but the right shoulder is usually higher than the left. The really profitable Inverted Head and Shoulders bottom will form after an extended price decline or downtrend. Price makes a low which forms the left shoulder and bounces to a minor high. Price then reverses and heads back down to form the major low which forms the head, then bounces back up to form one more minor high. Price declines again but does not penetrate the major low before it bounces, forming the right shoulder. The minor highs are connected with a trend line which may slope upward, and this trend line is called the neckline. An upside breakout from the neckline is the buy signal for this pattern, which confirms that a reversal of the downtrend has been made and that the stock is now in a uptrend. This pattern takes several months to form. As such, it trumps all other chart patterns. The Inverted Head and Shoulders pattern marks a major reversal on a stock chart. Because it takes many months to take shape, the turn around story of the stock can be known by fundamental analysis. The buy signal is when price breaks above the neckline. There is a lot of variation in this pattern and with volume. In a perfect world, volume in the formation of the left shoulder is often higher than volume during the formation of the head, confirming that price is declining with less intensity, and perhaps soon will find support. As the right shoulder completes, volume often will increase with the resulting price advance back up toward the neckline. My own experience with this pattern shows that this is a very idealistic view of what volume should do and more often than not, this volume pattern does not manifest itself during the Inverted Head and Shoulders pattern. Inverted Head and Shoulders patterns are relatively rare when compared with other chart patterns but that's part of what makes them so accurate. Keep in mind also that nothing in stock charting is absolutely perfect. Often shoulders will form in non symmetrical ways and necklines can slant or be slightly broken before the closing of the right shoulder and the buy signal. This pattern is not a quick profit pattern like the Ascending Triangle Breakout but with a little bit of patience, good things come to those who can wait.