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Stephen Oakes is an experienced financial titan from New York who brings Wall Street to Main Street. Over the past 11 years, he has developed and tested the renown, Oakes Momentum System, which uses a unique constellation of technical indicators to find timely buy and sell points. He holds an M.B.A. in the United States (New York) and has studied internationally at the Reims School of Management in France.

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Double 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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