CHART PATTERNS

Page 6

Double top and double bottom variations:

There are a multiple variations of the double top and bottom which can be found in the market. The double top/bottom can be seen as trend reversal patterns as well as corrective moves in line with the current trend as displayed below.

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Traditional double tops/ bottoms: have a greater potential to break out to the upside/downside; have a greater potential to break out to the upside/downside.

Corrective Double tops/ bottoms: have more of a potential to continue in line with the current trend especially if they are on a 50% or 61.8% FIB retracement level (more on that later).

Overbalanced double tops/ bottoms: This is where the correction prior to the double top/ bottom is greater than the preceding correction and has more of a potential to reverse back down/ up. They could even spike above/ below the resistance/ support level to give a false breakout before the reversal takes place.

Running double tops/ bottoms: These formations will eventually reach a new high/ low if there is a reversal off the level back inline with the current trend, especially if the support/ resistance level ties in wit h a 50% or 61.8 FIB retracement level.

Double top and double bottom breakout patterns (rectangles and wedges):

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