the hAnDbook of teChniCAl AnAlysisfigUre 13.4 A Head and Shoulders Top Formation.
figUre 13.5 An Inverted Head and Shoulders Formation.
head and shoulders top formation. The inverted head and shoulders formation is
completed with a valid upside breakout of the neckline. See Figures 13.4 and 13.5.
The pattern is completed once there is a valid penetration of the neckline. Un-
til a valid penetration has occurred, the formation is regarded as merely tentative.
In order for the pattern to avoid failure, the minimum one‐to‐one price objective
or target should be met before price reverses back up above the neckline or any
peak within the formation.
It should be noted that a valid penetration of the neckline is required in order
to distinguish it from triangle formations, which do not require a breakout for