the hAnDbook of technIcAl AnAlysIsfigure 14.21 An Overextended Tweezers Top on the 15‐min Chart of EURUSD.
Source: MetaTrader 4
■ (^) The colors of the real bodies are not significant in this case as it is the price
rejection level that is of interest.
■ (^) It is best found in a protracted uptrend that is beginning to display weakness.
■ (^) Its corresponding bullish version is the tweezers bottom.
Psychology:
■ (^) The tweezers top depicts a clear and distinct level of supply in the market.
Price is rejected twice at the same level, indicating that the sellers are very
determined to keep prices from being driven above that level. This obvious
inability to breach the high of the candlesticks induces a state of uncertainty
among the buyers who finally retreat, losing confidence in the market. The
bears are in control.
Trigger, Stoploss, and Confirmation:
■ (^) The trigger is at the low of the pattern.
■ (^) To confirm the reversal, price needs to close below the trigger level.
■ (^) If both candlesticks share the same low, then refer to the midway or low of
the candlestick that precedes the double candlestick pattern as a possible level
for a trigger.
■ (^) The stoploss is placed at the high of the pattern.
■ (^) A buystop entry order may be placed at the high of the second candlestick
only if there is evidence that the trend is still in effect.
See Figure 14.21. The tweezers’ double intraday penetration of the uptrend
line indicates potential exhaustion in the uptrend. The pattern was finally con-
firmed by the penetration candlestick that closed below the trigger level. Price