Gold Mega MCX Futures — Inverse Head & Shoulders - Pattern TradeMCX:GOLD1!
By Chart Pathik | 20 November 2025
Gold Mega MCX Futures — Inverse Head & Shoulders Breakout Suggests Positional Bullish Reversal
Market Overview
Gold Mega MCX Futures
have constructed a textbook Inverse Head & Shoulders pattern on the 15-minute chart, indicating a notable bullish reversal opportunity after an extended downtrend. This structural pattern reflects gradual absorption of supply, leading to a strong recovery scenario for positional traders.
After testing the lows near 121,800 (forming the head), gold has rebounded to repeatedly test resistance at the neckline around 124,455. The right shoulder completed with a swift reversal, and prices are now pressing against breakout territory. Sustained closes above the 124,455 neckline confirm classic breakout conditions for a multi-session rally.
Technical Structure and Pattern Logic
The Inverse Head & Shoulders structure, observed here, is a high-probability bullish reversal setup favored by institutional participants at the end of persistent downtrends.
The "head" forms at the extreme swing low (121,800), with each "shoulder" forming on higher lows, reflecting indifference turning into accumulation and finally conviction.
The pattern's neckline resistance is sharply defined at 124,455, which, when broken decisively, unlocks the full post-breakout measured move potential. Early aggressive entries are possible on high-volatility tests of the right shoulder at 123,255, setting up for add-on positions if a neckline breakout occurs.
Breakout Validation and Volume Confirmation
Key volume expansion on rallies above the neckline is crucial for confirming the breakout. A surge in open interest or strong momentum during/after a breakout candle provides additional confirmation and increases the probability of a sustained move.
Pattern Target Projection
Pattern Target: 128,100
This target is projected by measuring the distance from the neckline (124,455) to the head (121,800), then adding it above the neckline breakout.
Key Levels to Watch
Early Entry: 123,255 (for aggressive traders on pullbacks toward the right shoulder)
Break-Out Entry: 124,455 (confirmation on a convincing breakout and close)
Stoploss (Positional): 121,800 (well below head formation, protecting capital and structure)
Pattern Target: 128,100 (full measured move from bottom to neckline)
Scenario Analysis
If gold closes above 124,455:
Momentum is likely to accelerate toward 128,100, with the trend reinforced by any volume spike and reduced selling pressure at higher prices.
If gold fails at the neckline and closes back below 123,255:
A failed breakout or pattern trap could lead to a retest of 121,800 or even a deeper corrective phase if macro sentiment or global cues turn adverse.
Broader Market Context
This reversal setup comes as broader market volatility in precious metals fades and macro conditions appear stabilizing. Physical demand, safe-haven flows, and a potential resurgence in global risk aversion could further support the bullish thesis.
Historical Significance
The Inverse Head & Shoulders pattern is respected by traders for timing momentum shifts at major turning points. A similar structure triggered a sharp rally in gold Mega MCX Futures during Q4 2020, and the post-breakout rally then lasted for several weeks.
Market Psychology and Trader Positioning
This pattern shows a market transitioning from capitulation and fear (the head), through reluctant bullishness (shoulders), to widespread conviction (neckline breakout).
Large players will often accumulate around the shoulder and neckline and then aggressively push prices through resistance once weak hands exit.
Outlook
In the coming sessions, a sustained breakout above 124,455, validated by strong candle closes and higher volume, should favor multi-session long positions targeting 128,100. Pullbacks into the 123,255–124,455 area are accumulation zones for swing or positional traders.
Chart Pathik View
This pattern marks a structural turning point after a corrective phase. Patience on retests, strict risk management with stoploss at 121,800, and riding the full pattern target are the ideal tactics.
As gold transitions from a downtrend into a potential expansion phase, structure, discipline, and measured scaling are essential to positional success.
Last time this Inverse Head & Shoulders pattern on MCX Gold Futures produced a similar outcome was in June 2020, leading to a 10% rally in the following weeks.
