Trading term

What is Double top?

A double top is a bearish reversal pattern that forms after an uptrend: price rallies to a high, pulls back, then rallies to roughly the same high a second time and fails. The two peaks look like an 'M'. A close below the pullback low between them (the neckline) confirms the reversal.

A double top marks a level where buyers twice tried and twice failed to push higher. Price climbs to a peak, retreats to a support level (the neckline), rallies back to about the same peak — and stalls there again, unable to make a new high. That second rejection at the same resistance shows the uptrend's buyers are exhausted. The shape traces a clear 'M'.

The pattern isn't confirmed until price closes below the neckline — the low of the pullback between the two peaks. That break is the trigger; before it, the two peaks are just a stall, and price can still push through. A common target projects the height of the pattern (peak to neckline) downward from the break. The two peaks don't need to be identical — within a percent or two is normal.

A double top (M) reversal
NecklineTop 1Top 2Neckline break ↓

Two peaks at roughly the same level — buyers twice fail at the same resistance — sit on a neckline. The reversal confirms only when price closes below that neckline.

For example

A stock rallies to $60, pulls back to $54, rallies to $59.5 (roughly the same high), then rolls over. When it closes below the $54 neckline, the double top confirms, projecting a move toward about $48 ($60−$54 = $6, below $54).

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Why it matters to you

A double top is one of the clearest 'the uptrend is failing' signals because it shows buyers failing at the exact same level twice — an unambiguous loss of momentum. It hands a trader a defined trigger (the neckline break), a measured target, and an obvious invalidation level (a new high above the peaks).

⚠ Wait for the neckline break

The mistake is shorting the second peak, assuming the double top is 'done.' Until price closes below the neckline, it's just two highs — plenty of would-be double tops simply break to new highs instead. The neckline break is the confirmation; the second peak alone is not.

Frequently asked questions

Is a double top bullish or bearish?

A double top is bearish — it forms at the end of an uptrend and signals a reversal down. Price twice fails to break above the same resistance, and a close below the neckline (the pullback low between the peaks) confirms the downturn. Its mirror image, the double bottom, is bullish.

How do you confirm a double top?

Confirmation comes when price closes below the neckline — the low of the pullback between the two peaks — ideally on rising volume. Before that break, the pattern isn't complete and price can still make a new high. Many traders also watch for a failed retest of the broken neckline.

What is the price target for a double top?

The classic method measures the height of the pattern — from the peaks down to the neckline — and projects that same distance downward from the neckline break. It's an estimate, not a guarantee, so most traders manage the trade with other levels too.

Do the two tops have to be the same height?

No — they should be roughly equal, typically within a percent or two, but they don't need to be identical. What matters is that price twice failed at about the same resistance level. A large difference between the peaks weakens the pattern.

Read the full guide

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