the hAnDbook of teChniCAl AnAlysisbe extremely low or below average, indicating a lack of interest in the island top
or bottom formation, thereby indicating the possibility of a potential reversal. See
Figures 13.21 and 13.22. Island reversal formations tend to be more reliable if the
island tops or bottoms develop in a price range where:
■ (^) There are prior resistance or support levels or
■ (^) There are other resistive confluences in an island top formation or support-
ive confluences in an island bottom formation comprising Fibonacci or Gann
levels, Floor Traders Pivot Point levels, psychologically important price levels,
figUre 13.21 An Island Top Formation within a Larger Descending Triangle Forma-
tion on the Daily Chart of PowerShares DB U.S. Dollar Bullish Fund.
Courtesy of Stockcharts.com
figUre 13.20 A Completed Triple Top Formation on the 15‐Min Chart of EURUSD.
Source: MetaTrader 4