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Finance Glossary

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Inverse Head-and-Shoulder-Chart


A chart that looks like shoulders and a head upside down... if you squint really hard or have had too many martinis at the company lunch.

When the chart is showing sales, company earnings, or stock market prices, a chart of this shape shows that a downward trend has reversed:

The first upside down shoulder shows a drop, then prices or sales go up. Then there's a huge drop followed by an increase (that's the head) and then a smaller drop followed by an increase (that's the second shoulder).

The idea is that this is the time to breathe a sigh of relief that the downturn is getting better.