As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
|
 46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 |
As of 11/20/2024
Indus: 43,408 +139.53 +0.3%
Trans: 17,002 -26.31 -0.2%
Utils: 1,055 +1.25 +0.1%
Nasdaq: 18,966 -21.33 -0.1%
S&P 500: 5,917 +0.13 +0.0%
|
YTD
+15.2%
+6.9%
+19.7%
+26.3%
+24.1%
| |
|
46,000 or 43,000 by 12/01/202418,000 or 16,600 by 12/01/20241,075 or 1,000 by 12/01/202420,000 or 18,400 by 12/01/20246,100 or 5,800 by 12/01/2024 | ||
Statistics updated on 8/26/2020.
For more information on this pattern, read
Encyclopedia of Chart Patterns Second Edition
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Adam is a term that describes how the top looks, in this case, Adam sports a narrow, pointed top, perhaps with a one-day upward spike. The Eve top is more rounded looking and wider. If Eve has 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 substantially over their height. When trying to decide which is which, ask yourself if the two tops appear different or similar. With Eve & Adam, the two should look different (the first wide and the second narrow).
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Overall performance rank (1 is best): 16 out of 36
Break even failure rate: 21%
Average decline: 15%
Pullback rate: 64%
Percentage meeting price target: 55%
The above numbers are based on 662 perfect trades. See the glossary for definitions. |
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|
| Characteristic | Discussion | 
Configuration |
| Price trend | Upward leading to the pattern. | |
| Shape | Two distinct tops that look different. Eve appears first and is rounded looking and wider than Adam. Adam comes second and is narrow, an inverted V, often appears as a 1-day price spike. | |
| Valley | The valley drop between the tops should measure at least 10%, but allow exceptions. The figure to the right shows the details. | |
| Top price | The variation between price peaks is small, often less than 3%. The two tops should appear to peak near the same price. The figure to the right shows the details for generic double tops. | |
| Separation | The twin peaks are several weeks apart with most falling in the 2 to 6 week range. The figure to the right shows the details. | |
| Confirmation | The double top confirms as a true double top once price closes below the valley between the two peaks. | |
| Volume | Usually higher on formation of the left peak. |
| Trading Tactic | Explanation | 
The Measure Rule |
| Measure rule | Compute the height from the highest peak (B in the figure to the right) to the lowest valley (A) in the pattern then multiply by the above 'percentage meeting price target.' Subtract the result from the breakout price (A) to get the target (C). | |
| 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 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 (meaning the double top appears as part of an upward retrace in a downtrend), confirmation of the top may mean that the end of the decline is near (10% to 20% below and a month away). | |
| Trends | A short-term rise (0-3 months) leading to the double top results in the best post breakout performance. | |
| Yearly low | Double tops with breakouts in the lowest third of the yearly price range outperform. | |
| Pullbacks | Pullbacks hurt post breakout performance. |
The figure on the right shows an example of an Eve & Adam double top chart pattern. The Eve top has several days at about the same price level. Adam has a long, single price spike. The two tops look different. Eve is wider than Adam and more rounded looking.
The Eve & Adam double top chart pattern confirms when price closes below the valley between the two tops, shown here as point A.
Price at point B attempts a pullback but does not quite make it up to the price level of the breakout (A).
Just by looking at this example, you can see that it fulfills the measure rule. That means the decline after this pattern confirms is well below the height of this pattern projected downward from A.
-- Thomas Bulkowski
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