03 Jan 2013 Investor Education Series – Technical Analysis: Reversal Patterns – Double Tops and Bottoms
“Two tops that approximately the same price level” is only half the explanation. Prices must decline below and close below the low point established between the two tops (the middle reversal point) before a double top has been activated. In a double bottom, prices must close above thehigh pointin between the two bottoms to establish a double bottom. Taking the distance from the double top or bottom to the point in between and adding that distance to the breakout level can determine the measuring objective. The middle reversal point will also provide support for any pullback.
Anglo American Double Bottom:
Double Top – Platinum Index:
Head Sanlam iTrade