Bottom escape form: M head

M head, also known as double top, is one of the more common reversal patterns in the K-line chart. It consists of two relatively close high points. Its shape is similar to the English letter "M", hence the name. In the process of continuous rise, when the stock price rises to a certain price level, the trading volume is significantly enlarged, and the currency price begins to turn around and fall back; when it falls to a certain position, the currency price rebounds upward again, but the trading volume is slightly lower than that at the first peak. It contracted, rebounded to near the previous high, then fell for the second time, and fell below the low of the first fall. The currency price moved like an M shape, forming a double top.

The characteristics of M head are as follows:

1. The M-head pattern is formed after the currency price rises to a certain stage. The pattern appears with two peaks, becoming the left wing and the right wing respectively. Theoretically, the two high points of a double top should be basically the same, but in actual K-line trends, the left front is generally slightly lower than the right front, with a difference of about 3% being common.

2. A falling low point is formed at the first peak (left wing). Draw a horizontal line at this position to form what is usually called a neckline. When the stock price rises again and falls below the support of this horizontal line (neckline), The double top pattern is officially formed.

3. During the formation of the double top, the trading volume of the left front is larger, followed by the trading volume of the right front. The trading volume is decreasing, indicating that during the second rebound of the currency price, the intensity of funds chasing the increase is getting weaker and weaker, and the currency price has risen to the end.

4. After the double top pattern is formed, the currency price will often show a counterattack trend during the decline, but the counterattack is not strong, and the neckline position constitutes strong resistance.

When investors encounter the M head pattern, how to find the best selling point?

The first selling point is the right top turning point of the "M head", where most investors sell. This is the best selling point of the "M head". Anyone who sells here can be called a "prophet".

The second selling point is the neckline. After the stock price falls below the neckline, it indicates that a larger downward trend is coming. At this time, selling all the goods in hand is the wisest operation.