By InTheMoneyStocks.com on May 11th, 2010 5:00pm Eastern Time
One of the best and most simple patterns to find is the double top. While most intraday double tops will be a good resistance level and a possible intraday scalp trade area, they are not all created equal. As traders all we look to do is put the odds in our favor. Therefore, utilizing a technical approach our goal is to take advantage and read the best support/resistance levels possible.
When trading the double top pattern intraday we want to spot a top that occurred several days ago. In fact, the longer back the better the odds. For example, look at the Costco Wholesale Corporation (NASDAQ:COST) 15 minute chart below. In this chart example you will see that COST made a significant pivot high on December 7th around the $59.75 level. Then a number of days later at the open of trading, COST trades up to that same level and then sells off. As a trader you should always keep a 10 day chart up on the smaller time frames as this will help you identify prior major resistance levels and reveal high probability trades.
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