ZYDUS- Inverted Head and Shoulders Pattern

Pattern Under Observation

⬜️ The Inverted Head and Shoulders (HnS) is one of those patterns that tells us that market might have done falling and is getting ready to rise again. An inverted HnS after a bearish run is the reciprocal of a HnS pattern at the top of a rally.

⬜️ The psychology behind the pattern is very simple: at first, sellers are in charge, but later each time they push the price down, buyers push it back up with more force towards a certain level. By the time the right shoulder forms, buyers are clearly stronger, and the breakout of resistance (neckline) confirms the shift.

⬜️This pattern works best after a clear downtrend, especially near a support area. But if you see it forming in a sideways, choppy market, you have to be careful as it might trick you with a false breakout.

⬜️ For targets we measure the distance from the lowest point of the pattern to the resistance zone (neckline) and then extend a 1:1 from resistance. This gives us a probable target zone which can be hit with momentum. As the stocks is coming out of resistance, some short covering and fresh buying leads to such expected move.

⬜️ Higher targets to previous highs can’t be rules out of course.



Stock Under Observation


Here are a few compelling observations indicating the end of a downtrend in the Zydus Lifesciences Limited

➞ The stock has formed Inverted HnS pattern after a yearlong bearish move.
➞ It has broken out of resistance zone after 9 months
➞ It is currently trading at the highest price since January 2025
➞ It has printed a higher low and higher high structure shift
➞ There are two consecutive weekly close above the psychological 1000 resistance zone
➞ A continuation can take it to potential targets or towards previous highs.
➞ Could be worth taking bearable limited risk.

Remember that this is not an investment advice. This is purely educational, and I personally don't have any position in this stock. Please apply your due diligence before taking decisions.

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