An inverse head and shoulders pattern is a pattern in a chart that signals the reversal of a downtrend and the beginning of a new upward trend. The neckline is a line drawn from the reaction high of the left shoulder to the reaction high of the right shoulder. If the price penetrates the neckline on high volume the pattern is confirmed. A price target is determined by taking the distance from the neckline to the bottom of the head. Add the value of the distance to the price at the neckline, and that's your price target.

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