Double Top & Double Bottom Chart Patterns
DOUBLE TOP PATTERN A double top is a bearish reversal pattern that is very commonly used by the intraday or positional traders. This pattern resembles the letter ‘M’. In this pattern, the price of the stock forms a peak at the resistance level and retrace back to the level of support. After reaching support level, it bounces back to the resistance level and forms a peak. It once again reaches the level of support. Here, at this support level, it breaks the level into the downtrend. How to identify Double Top Pattern? Generally, this pattern can be found in the uptrend. The first top is formed in the shape of inverted ‘U’ or ‘V’ symbols. Second top is also formed in the same shape. Most importantly, both the tops have almost same height. We can confirm the formation of this pattern when the price breaks through at support level and continue moving downwards. The Volume also rises high during the process of break the support level. Setting Stop Loss & ...