Online Trading Concepts

Tweezer Tops and Bottoms

Tweezer Tops and Bottoms

  1. Tweezer Tops and Bottoms
  2. Intra-day Tweezer Tops and Bottoms

The Tweezer Top formation is viewed as a bearish reversal pattern seen at the top of uptrends and the Tweezer Bottom formation is viewed as a bullish reversal pattern seen at the bottom of downtrends.

Tweezer Top and Bottom Candlestick pattern

Tweezer Top formation consists of two candlesticks:

Tweezer Bottom formation consists of two candlesticks:

Sometimes Tweezer Tops or Bottoms have three candlesticks.

A bearish Tweezer Top occurs during an uptrend when bulls take prices higher, often closing the day off near the highs (typically a strong bullish sign). However, on the second day, how traders feel (i.e. their sentiment) reverses completely. The market opens and goes straight down, often eliminating the entire gains of Day 1.

The reverse, a bullish Tweezer Bottom occurs during a downtrend when bears continue to take prices lower, usually closing the day near the lows (typically a strong bearish sign). Nevertheless, Day 2 is completely opposite because prices open and go nowhere but upwards. This bullish advance on Day 2 sometimes eliminates all losses from the previous day.

Tweezer Bottom Candlestick Chart Example

A Tweezer Bottom is shown below in the chart of Exxon-Mobil (XOM) stock:

Tweezer Bottom Candlestick Chart

The bears pushed the price of Exxon-Mobil (XOM) downwards on Day 1; however, the market on Day 2 opened where prices closed on Day 1 and went straight up, reversing the losses of Day 2. A potential buy signal might be given on the day after the Tweezer Bottom, if there were other confirming signals.

Next Page - Intra-day Tweezer Tops and Bottoms