Double Tops & Double Bottoms
A level tested twice and rejected — one of the cleanest reversal signals.
Double tops and double bottoms are among the easiest reversal patterns to spot, because they tell such a clear story: price tried to push past a level twice, failed both times, and then gave up.
- Double top (bearish, looks like an “M”) — price rallies to a high, pulls back, rallies to roughly the same high again, then fails and falls. Buyers couldn’t break through twice.
- Double bottomA twin-peak (or twin-trough) reversal pattern. (bullish, looks like a “W”) — price drops to a low, bounces, drops to roughly the same low again, then turns up. Sellers couldn’t break through twice.
The power is in the failed second attempt. The first rejection might be chance; the second rejection at the same level proves there’s a genuine wall of supply (or demand) there. When price then breaks the other way — below the middle dip of an M, or above the middle peak of a W (the “neckline”) — it confirms the crowd has given up on that direction. Two failures at one level is the market telling you, clearly, “this far and no further.”
ExampleA stock hits ₹500, drops to ₹460, climbs back to ₹500, and stalls again — a double top. When it then breaks below ₹460 (the neckline), the pattern confirms; the failure to beat ₹500 twice has flipped the trendThe prevailing direction of price: up, down or sideways. down.
Common mistakeJumping in the moment you see two peaks, before the neckline breaks. Until price closes beyond the neckline, it’s just a range — it could break either way. The confirmation is the neckline break, not the second peak.
Key takeawayDouble top (M) and double bottomA twin-peak (or twin-trough) reversal pattern. (W) show a level rejected twice, then a reversal confirmed by a neckline break. The repeated failure proves a real supply/demand wall — but wait for the neckline break before acting.
FAQs
Do the two tops/bottoms need to be at exactly the same price?
No — roughly equal is enough; markets are messy. The key is that both attempts stalled in the same *zone* and failed. Obsessing over an exact-tick match misses the point: it’s the repeated rejection at a level, then the neckline break, that matters.