Is a Double Tops Chart Pattern Bullish or Bearish?

A double top chart pattern has an M shape and it occurs at a market top hence its name double top chart pattern and it signals a bearish stocks price reversal in the stocks market.

Once a double top chart pattern is confirmed then the stocks market will be considered to be bearish, therefore a double tops is bearish.

Double Tops Chart Pattern

Double tops stocks pattern is a reversal chart pattern that forms after an extended upwards stock trend. As its name implies, this double top pattern formation is made up of two consecutive peaks which are roughly equal, with a moderate trough between.

This double tops chart pattern formation is considered complete once stocks price makes second peak & then penetrates lowest point between the highs, known as the neck line. The sell signal from this double tops chart pattern formation occurs when the stocks market breaks-out below neck line.

In Stocks, this double top chart pattern formation is used as a early warning signal that a bullish stock trend is about to reverse. However, double top chart pattern is only confirmed once the neckline is broken & the stocks market moves below the neckline. Neckline is just another name for last support level formed on the Stocks chart.

Summary:

• Double tops stocks trading pattern forms after an extended move upwards
• This double tops pattern formation indicates that there will be a reversal in the stocks market
• We sell when the price breaks out below neck-line: see below for explanation.

Double Top Pattern - Is a Double Top Pattern Bullish or Bearish?