Developing inverse head and shoulders formation

A potential inverse head and shoulders formation is developing. It may trigger a strong buy signal.

Signals from such formations are considered some of the strongest buy signals in technical analysis. Please note that such a signal may be triggered soon. In some situations it may be advantageous to sell before the buy signal is triggered, as this gives a much bigger upside.

Important indicators of a developing break upwards are:

• Positive volume balance
• Break through falling trend
• Increasing volume up from the head
• Decreasing volume heading down towards right shoulder
• Increasing volume heading up from right shoulder

However, if volume development is negative and the stock remains in a falling trend, it indicates fear among investors and further negative development for the stock.