A Double top is a technical analysis pattern where an asset's price reaches the same high, with a moderate decline in between, resembling the shape of the letter 'M'. The low point between the two peaks, known as the "neckline," serves as a critical support level that often confirms the pattern's bearish signal once broken.
Double top signal
The Double top pattern is considered a bearish reversal signal, typically appearing at the end of an extended upward trend. Some traders may enter a short position when prices trade below the low point, while others might use other indicators like a moving average to confirm.