#doubletoppattern

[naviamarketslimited]

Double Top Pattern Explained | Spot the ‘M’ Shape That Signals a Market Reversal

Ever bought a stock near the top—only to see it fall right after? Sometimes, the chart gives a warning well in advance.

In this video, we explain the Double Top pattern, a classic bearish reversal pattern in technical analysis that often appears after an uptrend.

Read the full article here: https://navia.co.in/blog/understanding-double-top-pattern-technical/

[rc1989]

A Double Top is another common chart pattern, which consists of two peaks. This pattern usually indicates that the upward trend is weakening and that buyers are becoming dis-interested. Once the pattern has been completed, the security price typically declines.

The first part of the pattern is a peak that is created during and upward trend. Once this peaks, it faces resistance and is sold off until it hits the support level. Then, the price starts a run back towards the level of resistance in the previous peak, but again it is sold off and hits the support level again. The pattern is then completed when the security breaks the support line and begins a downward trend. The opposite is a Double Bottom pattern. This signals the reversal of a downward trend into an upward trend.

The pattern is created when a downward trend hits a new low with its price. This downward move will hit a support line and begin rallying to a new high, forming the resistance line. However, the stocks are then sold off, bringing the price down to the previous low. Again, the security hits the support line and starts rallying up. For the pattern to be completed, the price will move above the resistance line and continue moving upwards.