A Tweezer Top is a bearish reversal pattern seen at the top of uptrends and consists of two Japanese candlesticks with matching tops.
The tweezer top candlestick pattern is of the same structure as the tweezer bottom, except for the fact that it happens at the end of an uptrend, and therefore, it is a bearish reversal pattern. The first candle is bullish, and it continues in the same direction, while the second bearish candle indicates that the trend may be changing soon.
To identify a Tweezer Top, look for the following criteria:
- There must be two or more consecutive candles of either color.
- A clear uptrend should be present.
- Both candles must reach the same high point.
Once you have an uptrend, simply look for candles that have the same highs.
Although you shouldn’t completely ignore the body color and the shape of the candles, these factors are not that important.
The two candle’s upper shadows signify an area of resistance.
The bulls were not willing to buy above that highest price, so the bears returned and overpowered the bulls, pushing the price back down.
Since two or more candles formed shadows at this same level confirms the strength of the resistance and shows that the uptrend has likely paused or worse, has reversed into a downtrend.
Like the Tweezer Bottom, the Tweezer Top is viewed as a reversal pattern.
To better analyze a specific Tweezer Top, observe the following:
- If the Tweezer Top appears at market highs, it is more reliable.
- If the first candle has a large body and the second has a short body, the reversal is more reliable.
- If the Tweezer Top is followed by another reversal pattern, such as a Bearish Engulfing or Dark Cloud Cover, with identical highs, it is even more reliable.