First of all, we should be clear about the technical key points of the double top “M” head shape: 1. The top should appear at the position of the pressure line (the previous high point, that is, the high point on the left is the position of the pressure line). In addition, RSI and MACD indicators can be referred to.
2. The second top is slightly lower than the first, indicating that prices are unable to make a higher high and that the uptrend is over.
3. Then the price, after rising twice and failing to make a new high, turns around and falls below the neck line, the connection between the two tops, indicating that the price has made a new low and the trend has turned downward.
Note THAT WHEN WE TALK ABOUT “BREAKING THE NECK LINE”, WE ARE FOCUSING ON THE “CLOSING PRICE”, WHICH MEANS THAT “THE ENTITY NEEDS TO BE ABLE TO BREAK THE NECK LINE AND CLOSE below THE NECK LINE” in order TO RECOMMEND USING the DOUBLE TOP understanding.
