Double top and double bottom patterns: rules, targets and examples

A double top is a market that tries twice to break through the same high and fails both times. On a chart it looks like the letter M: a rally to a peak, a pullback to a valley, a second rally to about the same peak, and then a drop below the valley. A double bottom is the reverse, shaped like a W: two declines that stop at about the same low, with a rally in between, followed by a rise above that rally's high.

They are among the most common reversal patterns, and among the easiest to see after the fact. That is the catch. Two equal highs are only a double top once price breaks the valley between them. Until then, the second peak may simply be a pause before the uptrend continues.

This guide covers the anatomy, the confirmation rule, the measured target, the common variants, and three real examples on US stocks, plus a test of 111 completed patterns over two years on 60 large US stocks and ETFs.

Anatomy of a double top and double bottom

A double top has four parts:

1. A prior advance. The pattern reverses an uptrend, so there must be one.
2. Peak 1. The rally tops out and price pulls back.
3. The valley. The pullback finds support and buyers try again. A pullback of 10% to 20% on a daily chart is common. Shallow dips of 2% or 3% are usually just noise.
4. Peak 2. The second rally stalls near the first peak, typically within about 3%, and turns down. Volume on the second peak is often lighter than on the first.

The pattern completes when price closes below the valley's low, which is called the confirmation level or confirmation point. Many traders think of it as a support level that held once and has now given way. A double bottom mirrors each step: a prior decline, two lows at about the same level, a rally high between them, and a close above that high.

What the shape tells you

The first peak shows where sellers overwhelmed buyers. The second peak is a test. If buyers could not get through that level twice, it suggests the supply there is real: holders who are happy to sell at that price, or traders betting on a fall. The break of the valley shows that buyers who stepped in during the dip have also given up. A double bottom tells the same story about demand: a price where buyers appeared twice, and a rally that finally clears the last point of resistance.

Timing and spacing

Two peaks a few sessions apart are just a choppy top, not a double top. Edwards and Magee emphasized that the peaks should be separated by a meaningful reaction and a meaningful amount of time, typically weeks on a daily chart. Our test required at least 10 trading sessions between the peaks and a valley at least 8% below the first peak.

Variants: Adam and Eve

Bulkowski classified double tops and bottoms by the shape of each peak. A narrow, spiky peak is an Adam. A wider, rounded one is an Eve. That gives four combinations (Adam-Adam, Adam-Eve, Eve-Adam, Eve-Eve), which he catalogs separately. You do not need the labels to use the pattern, but they are a reminder that one-day spikes and broad rounded tops reflect different trading.

Calculating the target

The worked example shows why traders look closely at the numbers before acting. When the stop sits beyond the pattern's extreme, the risk is roughly the height of the pattern, the same as the target distance. The trade only makes sense if the target is reached more often than it fails. Some traders place a tighter stop, for example back inside the confirmation level, to improve the ratio, which means accepting more frequent stop-outs.

Three real examples

Microsoft, 2025: a wide double top. MSFT spiked to $555.45 on July 31, 2025, pulled back to $492.37 on September 5, and rallied to $553.72 on October 28, less than 1% short of the first peak. On November 19 it closed at $487.12, below the September valley. The height of $63.08 projected a target of about $429.29, 12% lower. The decline was slow. For two months the stock traded between about $439 and $495, and some traders would have given up. On January 29, 2026, a sharp drop took it through the target, 47 sessions after confirmation. The first peak was a one-day spike (an Adam) and the second a broader top (an Eve).

Apple, 2026: a confirmed double top that failed. AAPL topped at $280.91 on February 6, 2026, fell to $255.45 a week later and rallied to $276.11 on February 26. It closed below the valley at $250.12 on March 13, which projected a target near $229.99, 8% lower. The decline stopped at $245.51 on March 30, only 2% below the breakdown. By May 5 the stock had closed at $284.18, above both peaks. This is the failure mode to plan for: a well-formed pattern, a proper close below the confirmation level, and then a full reversal.

Home Depot, 2025: a double bottom. HD fell to $345.80 on June 18, 2025, rallied to $379.69 on July 1, and dropped again to $352.46 on July 16. The second low held about 2% above the first, which many traders read as a sign that sellers were tiring. On August 4 the stock closed at $380.82, above the July 1 high. The target was $413.58, 8.6% higher, and it traded there on August 19, eleven sessions later.

How often did it work? A test on 60 large US stocks

We used the same approach as in our head and shoulders test, on two years of daily bars (October 30, 2024 to October 29, 2026) for 60 widely held US stocks and ETFs.

The rules. Swings were marked with a 5% ZigZag on daily highs and lows. A double top needed two swing highs within 3% of each other, at least 10 sessions apart, with the valley between them at least 8% below the first peak. If a third peak at the same level followed, the case was counted as a triple top instead. Confirmation was the first close below the valley within 60 sessions of the second peak, before price rose more than 1% above the higher peak. A hit meant the target traded before any close above the higher peak (a failure), within 80 sessions. Double bottoms used the mirror-image rules.

The benchmark. If prices moved at random with no drift, the chance of reaching a target before a stop is the distance to the stop divided by the sum of the two distances. We averaged that over the same cases.

The patterns beat the benchmark, by a modest margin. Both versions reached their targets in about two-thirds of resolved cases, 11 to 13 percentage points above what the geometry alone would predict. That is a better showing than the head and shoulders managed in the same data.

Many patterns never confirmed. Our detector also found pairs of equal peaks that never broke the valley within 60 sessions. They are not in the table, because by definition they never gave a signal. They are a reminder that most equal highs are not double tops.

Double bottoms were more common. Our rules found 69 confirmed double bottoms and 42 double tops, in a period when most of these stocks rose. A rising market helps bullish patterns reach their targets, so part of the double bottom's result may simply reflect the market's drift.

Mistakes to avoid

• Calling the top at the second peak. Equal highs are common in uptrends that are simply pausing. The confirmation close below the valley is what separates a double top from a consolidation. Anticipating it means trading a pattern that does not exist yet.
• Ignoring the depth of the valley. A 2% dip between two highs is not a reaction; it is noise. The deeper and longer the valley, the more meaningful the test of the high.
• Forgetting the breakout above the peaks. If the second peak pushes clearly above the first and holds, the double top has failed, and that breakout can be the start of a strong move higher. The same goes in reverse for a double bottom that breaks below its lows.
• Using intraday wicks inconsistently. Decide whether you measure the pattern from closes or from highs and lows, and use the same convention for the target and the stop.
• Ignoring the broader market. A double bottom in a single stock during a sharp market-wide sell-off is fighting the tide. Check the index trend on the indices page.

Double tops and bottoms compared with similar patterns

How Finabase helps you find and test the pattern

Finabase does not label double tops automatically, because the definition involves judgment (how equal is equal, how deep is deep). It gives you the pieces to apply your own rules:

• ZigZag study. Add the ZigZag at 5% to mark the swings our test used, as on this two-year MSFT chart. The ZigZag indicator: filtering swings, and why the last leg repaints guide explains why its last leg can change until a swing is confirmed.
• Horizontal line tool. On any symbol's chart, draw a horizontal line at the valley (or middle peak) to mark the confirmation level, and another at the target. Signed-in users' drawings are saved per symbol.
• Volume pane. The chart shows volume under price by default, so you can compare the volume on the two peaks.
• Scanner. The Scanner lists stocks at 52-week highs and lows. A stock that returns to a prior 52-week high and stalls is a candidate for a developing double top, which you can then watch for confirmation.

Frequently asked questions

How equal do the two peaks need to be?

There is no official number. Most traders accept peaks within about 3% to 5% of each other on daily charts. Our test used 3%. The more they differ, the more the chart looks like an uptrend or a downtrend rather than a test of one level.

Is a double bottom more reliable than a double top?

In our two-year sample the hit rates were similar, 70% and 68% of resolved cases. Double bottoms were more frequent, partly because the market rose for most of the period. Results in a falling market could look different.

What if the second low is lower than the first?

A second low that undercuts the first slightly and then recovers is still often treated as a double bottom, and some traders view the brief undercut as a shakeout of weak holders. A second low far below the first is simply a continuing downtrend.

How long should I give the pattern to reach its target?

There is no rule. In our test the targets that were hit were usually hit within a few weeks to three months. The MSFT example took 47 sessions, the HD example 11.

Summary

A double top or bottom is a failed second attempt to break a level, confirmed when price breaks the opposite side of the pattern. The rules are simple: wait for the close beyond the valley or middle peak, measure the height for a target, and treat a move back beyond the peaks as proof that you were wrong. In our two-year test on large US stocks the patterns did a little better than the geometry alone would suggest, but one in three resolved cases still failed, and Apple's 2026 top shows how quickly a textbook signal can reverse. Use the pattern to define risk and reward, not to predict.