The Double Top is a bearish chart pattern in the shape of an “M”. The price makes two successive peaks at approximately the same level, indicating significant resistance. This chart pattern shows investors’ desire not to let the price reach new highs, and their desire to reverse the current trend.
The objective of a double top figure is calculated by plotting the height of the figure below the neck line.
When validating these patterns, it is common for the course to pullback on the neck line before reaching the objective of the figure.
Notes and Statistics: #
- In 75% of the cases, the movement is bearish after a double top.
- In 83% of the cases, the course breaks the neck line of the double top figure.
- In 71% of the cases, the goal of the double top figure is achieved when the neck line is broken.
- In 83% of the cases, the bearish movement continues at the break of the neck line of the double top pattern.
- In 61% of cases, after exiting, the price performs a resistance pullback on the neck line of the double top figure.