Study the double top as a defined sequence of swings, then record both confirmed and failed exits with the same rules.
Identify the swings and the boundary
A double top has two separate peaks near the same resistance zone, with a significant reaction low between them. That low supplies the downward confirmation level. Repeated intraday touches of one high do not necessarily create two peaks. Define your tolerance and the swing separation consistently.
Read the formation in its preceding trend
The conventional reversal case follows an advance. The second high may describe hesitation, but a trend that has not breached the intervening low may still continue upward. A pair of highs during a downtrend belongs to a different structural sample.
Use an explicit confirmation rule
The downward illustration closes below the reaction low between the two peaks. The second peak alone is not the trigger. Record the close used for confirmation and inspect whether subsequent rallies remain below the broken level.
| Measure | Value |
|---|---|
| Confirmation session (first bar is session 1) | 41 |
| Boundary | 62.00 |
| Confirming close | 61.00 |
| Formation extreme | 70.00 |
| Formation height | 8.00 |
| Geometric objective | 54.00 |
Height = |70.00 − 62.00| = 8.00
Objective = 62.00 − 8.00 = 54.00The objective illustrates a measuring convention. It supplies no probability, expected return or evidence that a trade reaches that price. Keep the projected level separate from the actual chart observations and from a written risk plan.
Compare volume on the same daily basis
Compare each swing and the confirming session with this stock’s own daily volume. Quiet activity around a base and expansion on an exit are conventional context, but they do not establish direction or identify who traded. An event can dominate a single volume bar.
| Measure | Value |
|---|---|
| Confirmation volume | 220.00 |
| 20-session average including confirmation | 106.20 |
| Relative volume | 2.07× |
Including the current session in the average differs from dividing by the prior 20 sessions. An intraday comparison at the same clock time uses another denominator. State which one you use before comparing examples.
An exit that does not persist
A brief close below the reaction low is followed by recovery and a move above both peaks. The failure chart shows why the second high is not proof that a major top has formed. A thesis needs an explicit invalidation level rather than an endlessly raised ceiling.
Distinguish nearby formations
A head and shoulders has a higher middle peak, while a triple top has three distinct tests. A rectangle can revisit resistance many times without the preceding advance required for this reversal interpretation.
Keep a reproducible research record
Apply the same swing definition and boundary rule to every chart in a sample. Formations become visible as later bars confirm swings, so preserve the date on which each observation was knowable.
- Record the preceding trend, candle interval, price scale and corporate-action basis.
- Label the swings and write a boundary rule before viewing the later path.
- Record the confirming close, subsequent retest and the price that invalidates the premise.
- Compare volume on a named denominator and retain failed exits as well as resolving examples.
- Review earnings and other events, execution costs and gap risk separately from the geometric drawing.
These formations are studied by reading charts. A list of stocks near a high or low does not identify this pattern.
Sources
- Edwards, Magee and Bassetti, Technical Analysis of Stock Trends, 11th edition: reversal formations and measurement conventions
- StockCharts ChartSchool: Double top (checked October 1, 2026)
Read our data and methodology notes for calculation context. This guide explains research tools and observations. It does not recommend a trade or investment.