NASDAQ's Double Top in March 2000: A Pivotal Market Shift
The NASDAQ Composite displayed a double top pattern in March 2000, marking a significant shift in the market's trajectory. This pattern, a bearish reversal signal, occurs at the end of an uptrend and can take weeks to months to play out.
The double top pattern consists of two highs at resistance levels with a pullback in between. A close above the previous high invalidates the pattern. To confirm the reversal, the second test of resistance must be met with a pullback. In the NASDAQ crisis of March 2000, this pattern was evident, indicating a potential downturn.
Selling short at the second top has lower success odds but offers a better risk-reward ratio. A breakdown under the middle pullback low confirms the double top reversal, signaling a shift from bullish to bearish territory.
The double top pattern in the NASDAQ Composite in March 2000 served as a crucial warning sign, heralding the beginning of a market downturn. Traders who identified and acted upon this pattern could have benefited from the better risk-reward ratio of selling short at the second top.
Read also:
- chaos unveiled on Clowning Street: week 63's antics from 'Two-Tier Keir' and his chaotic Labour Circus
- Skechers Debuts First American Stores Focused on Athletic Footwear Performance
- Budget discrepancy jeopardizes highway projects' financial support
- Racing ahead in Renewable Energy Dominance: Changzhou, Jiangsu Pushes for Worldwide Renewable Energy Ascendancy
