Trend exhaustion at key support/resistance levels
| Strategy Type | Reversal Pattern Recognition and Trading |
| Market Outlook | Trend exhaustion at key support/resistance levels |
| Risk Level | Low to Medium - One of the most reliable reversal patterns |
| Time Horizon | Swing Trading (3-15 days typical) |
| Best Conditions | Clear double test of support/resistance with volume divergence |
| Avoid When | Strong trending markets, unclear peak/trough levels, low volume |
| Nifty Futures | Double tops/bottoms at round numbers (20000, 19500) highly significant |
| Banknifty Futures | Faster formations due to higher volatility, use hourly charts |
| Stock Futures | Earnings often create double patterns - watch quarterly levels |
| Index Behavior | Major index double tops signal sector-wide distribution |
| Session Timing | Second test often occurs in afternoon session |
| Expiry Impact | Patterns near expiry may be distorted by rollover |
| Gap Behavior | Gap on second test often signals exhaustion |
| Fii Dii Influence | FII selling on second top test confirms pattern |
| Stt Impact | Swing trades reduce per-trade cost impact |
| Lot Size | Nifty 25 units, BankNifty 15 units - size for pattern targets |
| Margin | Overnight positions need full margin allocation |
| Slippage | Neckline breaks can be fast - use limit orders |
| Position Limits | Standard client position limits apply |
| Reporting | Large positions auto-reported to exchange |
| Margin Penalty | Maintain margins throughout holding period |
| Physical Settlement | Close stock futures before expiry week |
AlgoKing is a flight simulator for traders — real market data, real backtests, zero real-money risk.
Create your free accountEducational simulation platform. Not investment advice. No SEBI registration required.