SubscribeDouble Top and Double Bottom Reversal Patterns
July 23rd, 2006 • Related • Filed Under
The next sets of patterns are very important and are the easiest to spot. The double top and bottom form when the stock tries to retest old support/resistance levels and fails. Look at these examples of a double top and bottom:
Here, we see an “M†pattern forming on a double top which is a major bearish sign. In a double bottom a “W†type pattern is formed in which we see a bullish rally to follow. If the stock is to form more humps and continue to test the resistance or support areas there will be a major move in the direction indicated. This goes along with a major move if a stock moves sideways in a basing pattern for a long time. The longer the wait, the stronger the breakout whether it is up or down.
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