As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%	Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

As of 12/20/2024   Indus: 42,840 +498.02 +1.2%     Trans: 15,892 +32.54 +0.2%     Utils: 986 +14.76 +1.5%     Nasdaq: 19,573 +199.83 +1.0%     S&P 500: 5,931 +63.77 +1.1%	YTD  +13.7%   0.0%    +11.9%    +30.4%    +24.3%
Targets    Overview: 12/12/2024     44,200 or 41,750 by 01/01/2025   16,100 or 17,700 by 01/01/2025   1,050 or 975 by 01/01/2025   20,500 or 19,300 by 01/01/2025   6,100 or 5,775 by 01/01/2025
Chart Pattern Indicator: on 12/5/24

Bulkowski on Adam & Adam Double Tops

Statistics updated on 8/26/2020.

Adam & Adam Double Top Overview

During research for my book, Encyclopedia of Chart Patterns Second Edition (pictured on the right), I uncovered many facts about double tops. I discovered that twin peak patterns fail 60% of the time. That's how often price rises instead of drops. Confirmed Adam & Adam double tops fail much less, 25% of the time (which isn't small, either).

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): 19 out of 36 Break even failure rate: 25% Average decline: 15% Pullback rate: 64% Percentage meeting price target: 64% The above numbers are based on 1,114 perfect trades. See the glossary for definitions.

Adam & Adam Double Top

Score your chart pattern for performance

Adam & Adam Double Top: Identification Guidelines

Adam & Adam Double Top: Trading Tips

Trading Tactic	Explanation	The Measure Rule
Measure rule	Compute 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.
Stop	Place 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 velocity	A study concludes that a high velocity move leading to the chart pattern results in a high velocity move after the breakout.
Price reversal	Price must have something to reverse, so if the rise leading to the double top is small, expect a small decline.
Confirmation	Wait 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 60% chance that price will continue higher without confirming the double top.
Trend end	If 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).
Trends	Avoid a long term trend leading to the pattern as those produce the smallest declines post breakout.
Yearly high	Double tops with breakouts in the highest third of the yearly price range perform worst, but the performance difference between the other ranges is small.
Pullbacks	Pullbacks hurt post breakout performance. The link to the left defines pullbacks and the following link discusses performance.

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

See Also

• Pattern pairs. A close look at trading Adam & Adam double tops
• Knots: Trading pullbacks in double tops and predicting big declines.
• Score your chart pattern for performance.
• Adam & Eve double tops are a variation of Adam & Adam.
• Eve & Adam double tops work best in a bear market.
• Eve & Eve double tops are the classic double top.
• What happens when a double top grows a third top?
• Perhaps your double top is really a right-angled and descending broadening formation?
• A busted double top might be just what you're looking for.

I can walk on water as long as it's frozen.