Double Top

Definition:

Security within the context of an uptrend has the most recent swing high equal or nearly equal to the previous swing high.

Background:

The Double Top pattern can be formed because the sentiment that was formerly producing the uptrend is now possibly shifting and buying pressure is not strong enough to produce a higher swing high to keep the uptrend intact.

Double Tops can be a stronger downward reversal pattern after further confirmation when the next swing high that is produced is even lower.

Practical Use:

Technical analysts will use Double Tops to begin trying to find new selling opportunities as well as avoid buying the asset until a new buy setup is formed.