A fairly reliable bullish-to-bearish trading pattern. It is formed by three peaks, with the outer two peaks close in height and the middle peak the highest. It is generally taken as a trend reversal pattern. After a long bullish trend, the prices rise to a peak and subsequently decline into a trough, often marked by a head and shoulders pattern. An inverse head and shoulders pattern is also a reliable indicator that a downtrend is nearing a reversal.