Double top

From Traderpedia

When a market or security has twice risen to its resistance level.

A double top is a major reversal pattern that forms after an extended uptrend. As its name implies, the pattern is made up of two consecutive peaks that are roughly equal, with a moderate trough in between.

Double Tops appear on a chart in the shape of the letter "M" and are quite common.

A peak price is reached before a small decline, which causes the valley between the Double Tops, and then the price rallies again to a peak roughly equal to the level of the first. The price then falls away on a new downtrend.


Correctly predicting a Double Top can be tricky. This is because a simple uptrend, with each new wave of buying interspersed with minor reactions and profit taking, will appear as if it is making a Double Top formation. However, as you can see in the chart above, the price can progress in either direction.