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Two equal top with one month duration to occur with high volume at the second top or at the breakout point which indicates the trend is bearish in nature.Its used for holding short position.
This is formed by 2 tops (almost the same level) with a minimum period of 1 month. There should be a high volume in the 2nd top. You should go short when the pricing moves below the neckline of the last bottom.
The double top is when two tops of EQUIVALENT (not exactly equal) are seen in a period of one month. The short command is placed at the breakout provided that the volume is high at the second peak or the point of breakout.
hen a chart is plotted with the data and if we found there are two tops formed which are very much similar we can say a double top is formed, it will look like a Letter “M”. The twice touched high is considered as a resistance level. If the stock moves down again after touching the high which was previously formed then we can considered the trend is bearish.
Double top conditions
Two equivalent tops
Volume should be high after the second top
duration is 20 days to 1 month
Short position can be created below the previous low.
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