Double Top
Also called: M pattern
A bearish reversal shaped like an 'M', where price tests a resistance level twice and fails to break higher before turning down.
A double top forms after an uptrend: price rallies to a high, pulls back, rallies to roughly the same high, and fails again. The two rejections at the same ceiling show buyers exhausting. The low between the peaks is the neckline.
The pattern confirms on a close below the neckline, ideally on rising volume, with a target of the pattern's height projected down. It's the topping mirror of the double bottom.
On StockSetups
StockSetups detects double tops but, being long-only, filters them off the tradable board — useful to recognize so you don't chase a name failing at resistance.
Related terms
See double top on tonight's board.
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