A Tweezer Top is a bearish reversal pattern seen at the top of uptrends and consists of two Japanese candlesticks with matching tops.
The matching tops are usually composed of shadows (or wicks) but can be the candle’s bodies as well.
A Tweezer Top occurs during an uptrend when buyers push prices higher, often ending the session near the highs, but were not able to push the top any further.
Tweezer Tops are considered to be short-term bearish reversal patterns that signal a market top.
Recognition Criteria
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.
Meaning
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.