Double top
Price rises to a peak, falls, rises to about the same peak again, and fails to go higher. It looks like the letter M.
What it shows
A double top has two peaks at about the same price with a dip between them. A line across the bottom of the dip is the neckline.
The pattern is complete only when price closes below the neckline. Until then it may just be a range.
How we find it
The same code that draws it on your chart follows these steps, with the same result every time.
- Find two swing highs within 3% of each other, at least 15 bars apart.
- Find the lowest swing low between them and draw the neckline at that price.
- Require the dip to be at least 5% below the peaks.
- Mark complete when a close falls below the neckline by more than the margin.
Starting values: Peak match within 3%; Minimum dip 5% below peaks; Minimum bars between peaks 15; Margin 1.0%. These are proposed and will be tuned on real price data before launch.
How to read it
- Red dots are the two peaks.
- The blue line is the neckline across the dip.
- The gold dot is the first close below the neckline.
Status labels you may see
| Label | What it means |
|---|---|
| Forming | Two peaks, neckline not broken. |
| Testing the neckline | Within 2% above it. |
| Neckline broken | Close below the neckline. |
What cancels it
A close above the higher of the two peaks.
What traders check next
- Volume on the second peak compared with the first.
- Whether the break closed or only wicked.
- How far apart in time the peaks are.
Limits
- Many double tops turn into triple tops or ranges.
- Equal peaks are a matter of tolerance.
- Short double tops are common noise.
Try it in forecastviz
- Open any ticker and choose Reversal patterns → Double top in the left menu.
- Switch between 6M, 1Y, 3Y to see how the picture changes.
- Compare with Double bottom and Triple top on the same chart.
Questions
How is it different from resistance?
Resistance is the level. A double top is the pattern of two turns at that level plus a break of the dip.
Is it a signal?
No. It describes the shape of past prices.
Related trends
Further reading
- Edwards and Magee, Technical Analysis of Stock Trends
- Bulkowski, Encyclopedia of Chart Patterns
- Murphy, Technical Analysis of the Financial Markets
Educational only. Not financial advice, and not a price forecast. Charts are drawn by code from past price data, which may be delayed.