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Double Top and Bottom Formation | Technical Indicators | BCI Futures

The Double Top formation is a chart pattern found in a bull market. In the example shown in the figure below, the Double Top occurred after the market bottomed out at 40, increased in price, and bottomed out again. The subsequent increase in price is higher than the first, resulting in an indication to buy. The first vertical column of O’s is not necessary to constitute a Double Top formation, however, it is uncommon to see a Double Top formation without it.

Example of a Double Top Formation

The Double Bottom formation is a chart pattern found in a bear market. The example of a Double Bottom, also shown in the figure below, occurred after the market peaked at 50, dropped, and peaked again. The second decrease dropped further than the first, resulting in an indication to sell. The first vertical column of X’s is not necessary to constitute a Double Bottom formation, however, it is uncommon to see a Double Bottom formation without it.

Example of a Double Bottom Formation

See also  Pakistan Wheat Table