Skip navigation

Current DateTime: 04:21:14 12 Nov 2009
LinksList Documentid: 24355697

FEATURED QUIZZES


Current DateTime: 04:21:14 12 Nov 2009
LinksList Documentid: 33793611
  • The Billionaire BFF's

      These billionaire's have led undeniably exceptional lives. In the following quiz, can you tell which responses are based on facts from Buffett's and Gates' real lives?

  • The Many Myths of Coca-Cola

      Can you tell which statements are true, and which ones are just rumors?

  • Think You Understand Markets?

      We've selected some questions from the Financial Industry Regulatory Authority's test of investor knowledge. See how you do ...


Current DateTime: 04:21:14 12 Nov 2009
LinksList Documentid: 24890560
  • Winterizing Your Portfolio

      If 2009 was the winter of our discontent, will 2010 be a winter wonderland for investors? A lot depends on the recovery—or lack thereof.

  • Investor's Guide to Real Estate

      Some even say the long-awaited recovery is here. Regardless, buyers and sellers alike can profit from our guide.

  • Alternative Investing

      Stocks and bonds? Sure. But it's a big world out there for investors.

powered by digg
Charts 101: Why Double Tops May Shout 'Sell'
By: CNBC.com | 18 Mar 2009 | 10:06 AM ET
Text Size

Investors should watch out for double and triple tops in market charts as they can signal a fresh wave of selling or a range-bound market, Sandy Jadeja, chief market strategist at ODL Securities, told CNBC.

“If a market attempts several times to break through, then that’s going to create a trading channel, which is exactly what we’ve been seeing on the FTSE and the Dow,” Jadeja told CNBC.

In the double top pattern, a market reaches a particular price level, then backs off and then attempts to make a break through that price level again, Jadeja pointed out. If it fails to break the previous level higher, it can be interpreted as a bearish signal.

“That has actually occurred on the FTSE ... it failed in November, but then made a reattempt in January,” he said. Since the second test the London-based index slumped by 25 percent, he added.

- Watch the full Sandy Jadeja interview above.

Double tops are one of the simplest chart patterns to watch out for and can give “a very powerful sell signal” when combined with a moving average sell signal, Jadeja said.

A close below a market’s moving average tends to signal a fresh move lower. Click here for Jadeja expiation of how to use moving averages.

Sometimes markets stage a third attempt at the peak, forming a triple top pattern, but the sell signal remains the same if it fails, according to Jadeja.

© 2009 CNBC.com
Tools:
Print EmailAdd This share icon
  • digg share

CNBC HIGHLIGHTS

  • Bernard Madoff's Baseball Jacket
  • Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
  • US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
  • An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
  • Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
  • The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
  • Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
ADD COMMENTS
Remaining characters


Current DateTime: 01:39:37 12 Nov 2009
LinksList Documentid: 29778428

Current DateTime: 01:02:03 12 Nov 2009
LinksList Documentid: 29779196

Current DateTime: 01:02:03 12 Nov 2009
LinksList Documentid: 29779199

Current DateTime: 01:02:03 12 Nov 2009
LinksList Documentid: 29779198
  Data is a real-time snapshot  *Data is delayed at least 15 minutes
Global Business and Financial News, Stock Quotes, and Market Data and Analysis

© 2009 CNBC, Inc.  All Rights Reserved.
A Division of NBC Universal
Thomson ReutersThomson Reuters