As of 08/23/2019
  Indus: 25,629 -623.34 -2.4%  
  Trans: 9,740 -333.41 -3.3%  
  Utils: 832 -8.66 -1.0%  
  Nasdaq: 7,752 -239.62 -3.0%  
  S&P 500: 2,847 -75.84 -2.6%  
YTD
 +9.9%  
 +6.2%  
 +16.7%  
 +16.8%  
 +13.6%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019
As of 08/23/2019
  Indus: 25,629 -623.34 -2.4%  
  Trans: 9,740 -333.41 -3.3%  
  Utils: 832 -8.66 -1.0%  
  Nasdaq: 7,752 -239.62 -3.0%  
  S&P 500: 2,847 -75.84 -2.6%  
YTD
 +9.9%  
 +6.2%  
 +16.7%  
 +16.8%  
 +13.6%  
  Targets    Overview: 08/15/2019  
  Up arrow27,200 or 24,900 by 09/01/2019
  Up arrow10,700 or 9,550 by 09/01/2019
  Up arrow850 or 790 by 09/01/2019
  Up arrow8,200 or 7,400 by 09/01/2019
  Up arrow3,000 or 2,750 by 09/01/2019

Bulkowski's Adam & Adam Double Tops

 

Statistics updated on 10/17/2018.

Adam & Adam Double Top Overview

During research for my book, Encyclopedia of Chart Patterns Second EditionEncyclopedia of Chart Patterns 2nd Edition book. (pictured on the right), I uncovered many facts about double tops. I discovered that they fail 65% of the time, but that rate is deceiving. If you look at any twin peak pattern, price will fail to close below the valley formed between those two peaks 65% of the time. Price rises instead of dropping.

Adam is a term that describes how the top looks, in this case, a narrow, pointed top, perhaps with a one-day upward spike. Eve tops are more rounded looking and wider. If they have spikes, they tend to be more numerous and shorter. Many times the difference between Adam and Eve is the width of each over their entire height. Adam tops tend to remain narrow but Eve tops widen over their height. When trying to decide which is which, ask yourself if the two tops appear different or similar. With Adam & Adam, the two should look similar (both narrow).

For more information, see pages 275 to 290 of Encyclopedia of Chart Patterns, Second Edition and the following...

Adam & Adam Double Top: Important Bull Market Results

Overall performance rank (1 is best): 38 out of 53
Break even failure rate: 27%
Average decline: 14%
Pullback rate: 63%
Percentage meeting price target: 45%

The above numbers are based on 1,719 perfect trades. See the glossary for definitions.

Adam & Adam double top
Adam & Adam Double Top
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Adam & Adam Double Top: Identification Guidelines

CharacteristicDiscussion
Price trendUpward leading to the pattern.
ShapeTwo distinct tops that look similar, usually twin spikes poking above the surrounding price landscape. Adam tops are narrow, inverted V's.
ValleyThe valley drop between the tops should measure at least 10%, but allow exceptions.
Top priceThe variation between price peaks is small, usually less than 3%. The two tops should appear to peak near the same price.
SeparationThe twin peaks are usually several weeks apart.
ConfirmationThe double top confirms as a true double top once price closes below the valley between the two peaks.
VolumeUsually higher on formation of the left peak than the right, and trends downward.
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Adam & Adam Double Top: Trading Tips

Trading TacticExplanation Adam & Adam double top measure rule
The Measure Rule
Measure ruleCompute the height from the highest peak (point B in the figure to the right) to the lowest valley (A) between the two peaks and then multiply it by the above 'percentage meeting price target.' Subtract the result from the breakout price (A) to get the target (C). Also, see the double top study. for a new price prediction method.
StopPlace a stop loss order a few pennies above the highest peak (point B in the figure to the right) in the double top chart pattern. If that is too far away, then consider a volatility stop.
Price velocityA study concludes that a high velocity move leading to the chart pattern results in a high velocity move after the breakout.
Price reversalPrice must have something to reverse, so if the rise leading to the double top is small, expect a small decline.
ConfirmationWait for confirmation -- price to close below the valley floor (point A in the figure to the upper right). If you don't wait, there's a 65% chance that price will continue higher without confirming the double top.
Trend endIf a double top appears after a long-term DECLINE, confirmation of the top may mean that the end of the decline is near (10% to 20% below and a month away).
TrendsAvoid a long term trend leading to the pattern as those produce the smallest declines post breakout.
Yearly highDouble tops with breakouts in the highest third of the yearly price range perform worst, but the performance difference between the other ranges is small.
PullbacksPullbacks hurt post breakout performance. The link to the left defines pullbacks and the following link discusses performance.
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Adam & Adam double top chart pattern example

Adam & Adam Double Top: Example

The figure to the right shows an example of an Adam & Adam double top chart pattern. The two Adam tops are narrow peaks with a good decline between them (point B) and they appear after an upward price trend. The Adam & Adam double top confirms as a valid double top when price closes below point B, shown as the horizontal blue line.

To calculate a price target, subtract the price of valley B (the lowest valley between the two Adam tops) from the higher of the Adam peaks (A). That finds the height. Multiply the height by 45% (the percentage meeting price target from Important Bull Market Results table near the top of this page) and subtract the result from B. That gives a target shown as a red horizontal line on the above chart (point C).

-- Thomas Bulkowski

 

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Other Examples of Adam & Adam Double Tops

See Also

 

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My novels:      New                  Bumper's Story Head's Law

Chart Patterns: After the Buy Getting Started in Chart Patterns, Second Edition Trading Basics Fundamental Analysis and Position Trading Swing and Day Trading Visual Guide to Chart Patterns Encyclopedia of Candlestick Charts Encyclopedia of Chart Patterns 2nd Edition Trading Classic Chart Patterns

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