Bottoming Price Pattern - Reverse Head and Shoulders

A reverse head and shoulders includes three bottoms; left shoulder (LS), head (Head) and right shoulder (RS). The bottom of the head is the lowest of the three bottoms.

Below is a reverse head and shoulders bottom chart of weekly closes from Yahoo!Finance for Caterpillar (CAT).

The blue line, a resistance level called the neckline, connects the tops of the left shoulder and the right shoulder. Notice the price upside after the neckline resistance is broken.

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