Is a Double Tops Chart Pattern Bullish or Bearish?

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

Once a double top stock indices chart pattern is confirmed then the stock indices trading market will be considered to be bearish, therefore a double top is bearish.

Double Top Trading Pattern

Double tops stock indices pattern is a reversal stock indices pattern which forms after an extended upward indices trend. As its name implies, this double tops stock indices chart pattern formation is made up of 2 consecutive peaks that are roughly equal, with a moderate trough between.

This double tops stock indices pattern formation is considered complete once stock indices price makes the second peak and then penetrates the lowest point between the highs, called the neckline. The sell stock indices signal from this double top stock indices pattern formation occurs when the stock indices market breaks-out below the neck line.

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

Summary:

• Double tops stock indices trading pattern forms after an extended move upward
• This double tops stock indices chart pattern formation indicates that there will be a reversal in stock indices trading market
• We sell when stock indices price breaks out below the neckline: see below for the explanation.

Is a Double Tops Chart Pattern Bullish or Bearish?