Tweezers Top and Bottom

The Tweezers Tops and Bottoms patterns are composed of at least two Japanese candlesticks with the same lows for a Tweezers Bottom and the same highs for a Tweezers Top.

They show that prices struggle to go through a resistance or support. Though they are not major reversal patterns, they remain interesting to study. They can be observed over all time units.

Tweezers Top:

A Tweezers Top’s characteristics are as follows:

• The Tweezers Top must appear after an uptrend.

• The candlesticks should have the same highs (or almost).

Such a pattern appears after an uptrend, when prices reach significant new highs. The day after (or even over the next few days) prices try to reach new highs again without success. This is what is known, in western technical analysis, as a double top that would be visible over smaller time units. This pattern reveals a resistance level that is difficult to overcome and it also shows that the rise is pausing. Here, the 2nd candlestick forms a Bearish Engulfing together with a Tweezers Top, which strongly reinforces the significance of the pattern.

Tweezers Bottom:

A Tweezers Bottom’s characteristics are as follows:

• The Tweezers Bottom must appear after a downtrend.

• The candlesticks should have the same lows (or almost).

Such a pattern appears after a downtrend, when prices reach significant new lows. The day after (or even over the next few days), prices try to reach new lows again without success. This is what is known, in western technical analysis, as a double bottom that would be visible over smaller time units.

This pattern reveals a support level that is difficult to overcome and it also shows that the fall is pausing. Here, the 2nd candlestick forms a Harami together with a Tweezers Bottom, which strongly reinforces the significance of the pattern.

The Japanese candlesticks that form the Tweezers Top or Bottom are very often consecutive ones but they may also be separated by some other candlesticks. A Tweezers Top or Bottom can also be composed of more than two candlesticks that have the same lows or highs, which reinforces the pattern.

The Tweezers Tops and Bottoms are not major reversal patterns but they reveal a pause in the evolution of prices and they can be useful for position-taking if other signals reinforce them. For example, a Tweezers Top or Bottom that would appear on a major support or a resistance will be more interesting. The pattern can also form another reversal pattern while still being a Tweezers Top or Bottom. Here, we saw that an Engulfing or a Harami could appear but other patterns such as a Hanging Man, a Hammer or a Bullish Piercing Line could also be found. Since they are more powerful than a Tweezers Top or Bottom on its own, these patterns can give rise to position-taking, after the pattern has been validated. The invalidation threshold is then placed below the support or above the newly formed resistance.