DOUBLE TOP Meaning and
Definition
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A double top is a technical chart pattern commonly found in financial markets, predominantly in stocks and indices. It is regarded as a bearish reversal pattern that signifies a potential trend reversal from an uptrend to a downtrend. The pattern derives its name from the two consecutive peaks formed by the price movement on a price chart, resembling the shape of a letter "M". Typically, the first peak occurs at a previous high, followed by a temporary pullback or correction as the price retraces. Subsequently, the price rallies again to retest the previous high and forms the second peak at a similar level.
The double top pattern is considered significant as it indicates that the buyers' momentum is gradually diminishing, failing to push the price higher beyond the previous peak. This failure to continue the upward trend suggests a shift in market sentiment, indicating the potential entry of sellers. Traders and analysts often look for confirmation signals such as a breakout below the neckline, a line drawn between the price lows formed during the pullback, to determine the completion of the pattern and initiate bearish positions.
The double top pattern is widely used by technical analysts to identify potential selling opportunities or to confirm existing bearish views. It is often regarded as a reliable signal and can be employed in conjunction with other technical indicators or chart patterns to enhance the probability of successful trades.
Common Misspellings for DOUBLE TOP
- double dop
- Double tip
- double tot
- souble top
- xouble top
- couble top
- fouble top
- rouble top
- eouble top
- diuble top
- dkuble top
- dluble top
- dpuble top
- d0uble top
- d9uble top
- doyble top
- dohble top
- dojble top
- doible top
- do8ble top
Etymology of DOUBLE TOP
The word "double top" is formed from the combination of the adjective "double" and the noun "top".
The term "double" comes from the Old French word "dooble" which originated from the Latin word "duplus", meaning "twofold" or "double". This Latin term is a combination of "duo" (meaning "two") and "plus" (meaning "more").
The word "top" in this context refers to the uppermost part or peak of something. In Old English, it was written as "topp" and its exact origin is uncertain, although it is believed to have Germanic roots.
Therefore, "double top" has a straightforward etymology: "double" meaning two or twofold, and "top" referring to the uppermost part or peak of something.
