DR. REDDY S LABORATORIESÉducation
Double Top Pattern
* A double top is a strong bearish reversal pattern. It occurs when an uptrend fails to make a higher
high and instead, makes an equal (or near equal) high.
* The psychology behind the pattern is that the failure to make a higher high could be an early sign
that the momentum is leaving the uptrend. The equal high is an indication that the previous high
is being tested and confirmed as resistance. All this means that a reversal is likely to happen.
* As you can see from the image above, two horizontal lines are drawn off the double top. The top
line is the resistance line. The second line marks as support line where you can enter in trade after breakdown.
*To get your profit target for this pattern, you measure from the resistance line to the breakout
line. Then you take that measurement.
Kindly Let me know if you have any Questions.
Thank you .
high and instead, makes an equal (or near equal) high.
* The psychology behind the pattern is that the failure to make a higher high could be an early sign
that the momentum is leaving the uptrend. The equal high is an indication that the previous high
is being tested and confirmed as resistance. All this means that a reversal is likely to happen.
* As you can see from the image above, two horizontal lines are drawn off the double top. The top
line is the resistance line. The second line marks as support line where you can enter in trade after breakdown.
*To get your profit target for this pattern, you measure from the resistance line to the breakout
line. Then you take that measurement.
Kindly Let me know if you have any Questions.
Thank you .
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