Learn the stock market › Candlesticks and patterns › Lesson 5 of 6
Double top and double bottom
The shape
The price rises to a level, falls back, rises to the same level again and turns down. Two attempts to get past the same ceiling have failed. A double bottom is the same thing upside down: two falls that stop at the same floor.
It is the same idea as support and resistance: a level where the price has turned before. The difference is that the pattern only counts once the price breaks the other way.
The rule we used
Peaks and lows are counted as in the lesson on head and shoulders.
Double top. Two peaks in a row within 3% of each other, with a low between them at least 5% below the average of the peaks.
Complete. When the price closes below that low within 60 trading days after the second peak can be seen, unless it has first closed above the higher peak.
The target. Textbooks say the price should then fall as far below the low as the peaks stood above it.
A double bottom is counted the same way in the other direction.
A real example
The latest double top among the 20 companies with at least a month after it came in Costco. The peaks were on Jun 16, 2026 and Jul 29, 2026. The price closed below the low between them, $911.54, on Sep 8, 2026, which put the target at $843.49.
Costco: double top, Jun 16, 2026 to Sep 8, 2026
CostcoThe low between the tops
Up to Nov 6, 2026, the price has gone +15.8%.
What happened afterward?
Held means the price had fallen after a double top and risen after a double bottom. Ordinary period is how often the same company fell or rose over the same length of time from any day.
| Pattern | Times | Held | Ordinary period |
|---|---|---|---|
| Double top, 1 mo | 200 | 40.5% | 38.9% |
| Double top, 3 mo | 198 | 30.3% | 32.2% |
| Double bottom, 1 mo | 310 | 66.5% | 61.0% |
| Double bottom, 3 mo | 303 | 65.7% | 67.6% |
Reached target means some close in the three months after was at or beyond the target. Ordinary day is how often the same company got as far in the same direction within three months from any day. The middle target for a double top was 7.2% from the price.
| Pattern | Times | Reached target | Ordinary day |
|---|---|---|---|
| Double top | 188 | 41.5% | 37.0% |
| Double bottom | 286 | 62.2% | 65.3% |
None of the differences can be told apart from chance. After a double top the price fell about as often as on an ordinary day, and after a double bottom it rose about as often.
Under these rules we found 208 double tops and 328 double bottoms, against 58 head and shoulders. A double top needs three turning points, a head and shoulders five.
Test yourself
A stock has turned down twice at $200 and now closes below the low between the peaks. What do you know?
More numbers are on the Costco stock page.