Education | Technical Indicators | Candlesticks | Chart Patterns

Double Top
A reversal pattern whereby a top is formed on high volume, followed by a correction of at least fifteen percent, subsequently followed by a second top (within three percent of the first) on lower volume. Tops should be at least a month apart, and the reversal is confirmed when the second correction crosses the valley of the first correction.

This is a weekly chart of Adobe Systems where directly following the double-top pattern was a fifty percent drop in price over the next four months. It meets the technical specifications of a double-top pattern, including a second top formed several months after the first at a slightly lower price on volume (5 million) that was substantially less than the volume on the first top. The valley between the tops formed after a greater than fifteen percent drop in price.

You can choose up to four indicators at a time, such as volume, to display above the chart, by clicking on "Indicators" within SwingTracker. By using the "Pointer" in SwingTracker, you can isolate a specific period, and the price and technical information from that period will be displayed on the bottom of the screen. All drawing and pointing function in SwingTracker 3.1 are performed by clicking "Toolbox".

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