Tweezers Top is a two-candlestick bearish reversal pattern during an uptrend or a rally. It signifies the end of the uptrend and the beginning of a sideways or downward move.
Remember that after a reversal pattern, a sideways movement may occur before the decline.
It consists of two or more candlesticks with matching highs. Ideally, the first candle has a long white real body, whereas the second has a small body. The significance of the matching highs lies in the fact that buyers fail to pull prices to higher levels as they are running out of steam.
This is also indicated by the small size of the second real body, which also signals indecision and hesitation to follow the established trend.
Let’s take a look at the specifications of the Tweezers Top:
- Ideally, a long white real body at the top of the uptrend.
- The second candle may be small of any color.
- Matching highs
Great! Now, it’s time to explore any potential sell setup using the Tweezers Tops. Well, a potential sell is seen just below the low of the pattern. Of course, the protective stop loss is seen above the matching highs.
I hope you enjoyed it. See you in a while