How to trade a double top
A is a reversal pattern that occurs at the end of a strong move up - there are two peaks at approximately the same level (with the second notably not able to reach the high of the first), separated by a sharp dip in-between... which is the "neckline".
The drop down from the neckline (which is the ideal entry point when shorting) is approximately equal to the price difference between the neckline and itself.
In this case:
- the neckline was $9614
- the was $13228
= difference of $3614
- Neckline of $9614 minus difference of $3614 = Target of $6000
This target also lines up perfectly with the (current) daily 200 Moving Average... a powerful support line if ever there was one.
Here is the link for my free EMA/SMA indicator, offering key areas of potential strong .
Also save crucial space on your Trading View chart by utilising my free RSI and StochRSI indicator which overlays both in a clear and helpful fashion.
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