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Double Top Reversal Pattern
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.
