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Tagged: duration of two Double Top
Two equivalent tops in a price pattern is called double top.
Conditions:
1. The second top’s volume or neckline(ie bearish trend) should be high
2. Atleast 1 month gap is needed in between each top.
3.Short position should be considered at neckline.
price pattern – double top
conditions:(using line charts with daily price)
It is the other extreme of double bottom. Two consecutive tops within a period of one month and reversal happening with high volumes indicates sellers are strong and the stock is moving bearish. it will be the right time to exit the stock
Double top shall be defined as a price pattern which is based on Dow theory. The conditions for bearish trend determination are,
1. Identify the two equivalent tops in the chart.
2. Volume in the second top should be high.
3.Duration between the two tops shall be around 20 days.
4.Short position can be created below the previous low neck line.
A double top is formed when the following happens
– Two equivalent tops with at least 20 days of duration between them
– High volume at the second top or at the breakout after the second top
Short posistion can be considered below the low point between the two tops
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