inverted formation(redirected from Inverted Formations)
In technical analysis, a pattern that looks like the opposite of another pattern. For example, a saucer formation looks like a teacup on a chart, while an inverted saucer looks like a teacup that has been turned upside down. Obviously, an inverted formation gives the opposite signal from the "normal" formation. For example, a saucer is a bullish indicator, while an inverted saucer is a bearish indicator.
In technical analysis, a chart pattern that is upside down from its usual configuration. For example, a saucer pattern is a U-shaped curve indicating a market bottom. An inverted saucer is an arched formation indicating a market top. When a chart formation is inverted, it indicates the opposite future stock movement of the basic formation. Thus, while a head-and-shoulders formation is a bearish indicator, an inverted head-and-shoulders formation is a bullish indicator.