Double top in $FUBO so investor is short selling it

 

👽 A double top is a technical analysis chart pattern that indicates a potential reversal in the price of a security, such as a stock or cryptocurrency. It forms when the price of the security reaches a high, pulls back, and then reaches the same high again, creating two peaks.

Here are the key characteristics of a double top:

1.  Two highs: The price reaches a high, pulls back, and then reaches the same high again.

2.  Valley in between: There is a valley or trough between the two highs, which represents a pullback in price.

3.  Resistance level: The double top forms at a resistance level, which is a price level that the security has difficulty breaking through.

4.  Reversal pattern: The double top is considered a reversal pattern, as it indicates that the upward trend is weakening and may be about to reverse.

To confirm a double top, traders often look for additional signs, such as:

1.  Volume decrease: A decrease in trading volume during the second peak, indicating a lack of conviction among buyers.

2.  Bearish divergence: A divergence between the price action and a technical indicator, such as the Relative Strength Index (RSI), which can indicate a weakening trend.

3.  Break of support: A break of a support level, such as a trend line or moving average, which can confirm the reversal.

If a double top is confirmed, traders may consider selling or shorting the security, as it may indicate a potential downturn in price.

Here's an example of a double top in trading:

Security: Apple Inc. (AAPL)

Timeframe: Daily chart

Price: $140-$150 range

In this example:

1.  First peak: The price of AAPL reaches $148 on February 10th.

2.  Pullback: The price pulls back to $142 on February 20th, forming a valley.

3.  Second peak: The price rallies again and reaches $148 on March 1st, forming the second peak.

Confirmation signs:

1.  Volume decrease: Trading volume decreases during the second peak.

2.  Bearish divergence: The RSI indicator shows a bearish divergence, indicating weakening momentum.

Trade idea:

1.  Sell/Short: Consider selling or shorting AAPL near the second peak ($148).

2.  Stop-loss: Set a stop-loss above the second peak ($150).

3.  Target: Set a target near the valley ($142).

Keep in mind that this is just an example, and actual trading decisions should be based on a comprehensive analysis of the market and individual risk tolerance.