Technical Analysis

Double Top

A bearish reversal pattern where price tests a resistance level twice and fails, confirming a shift from uptrend to downtrend.

Key rules

1. Two peaks at approximately the same price level
2. Second peak typically forms on lower volume than the first
3. Neckline break (below the trough between peaks) confirms the pattern
4. Target = neckline − (peak to neckline distance)
5. Deeper neckline retest before further decline is common

The double top is a classic bearish reversal pattern. It forms when price reaches a high, pulls back, rallies to approximately the same high again, then breaks down below the intermediate low (the "neckline") between the two peaks.

**Structure** - First peak: initial high on high volume - Trough: pullback to support (the neckline) - Second peak: retest of the high, often on lower volume - Neckline break: confirmation of reversal

**Volume Clue** The second peak typically forms on notably lower volume than the first. This signals diminishing buyer enthusiasm at the resistance level.

**Target** Measured move = distance from the peaks to the neckline, projected downward from the neckline break.