subject: Stock Charts For Beginners - What To Do With A Double Top Chart [print this page] In a double top the cost goes up, then declines and next climbs back up. The valley somewhere between the double tops is labeled as the "support" level. When the value tumbles down to the support level and then goes on to fall through it in that case it's seen as an added confirmation to sell and the uptrend is thought to be done.
The stock analysts analyze how far the price is then almost certainly going to drop by calculating the length going from the support level to the top of where the peak was. This is seen as what lengths the selling price can fall underneath the support level e.g. if the variation in price from the top to the support level is two hundred subsequently the value can easily possibly drop that much below the current support.
An added consideration is volume, it could be smaller on the following top than on the first and trading volume will boost once the lower threshold is broken through.
Stock Charts For Beginners - What To Do With A Double Top Chart
