What it means
The lower right shoulder shows buyers weakening: a lower high.
In practice
The pattern is a trend change drawn out in steps: a high, a higher high, then a rally that cannot reach the previous high. Traders wait for a close through the neckline before acting, then project the distance from head to neckline as a target.
A return to the neckline from the other side after the break is a common second entry.
What to watch for
The pattern is easy to imagine on any choppy chart, and most that are spotted early never complete. A sloping neckline makes the breakout point unclear, so wait for the close.
Related terms
3 terms- Double topTwo failed attempts at the same high, completed by a close below the low between them (the neckline).
- Measured moveA rough target that projects a pattern's height from its breakout point.
- Change of characterThe first close against the trend through its last protected swing, an early sign the trend may be turning.