Silver (XAG/USD) – Bearish Reversal Forming via Classic Double Top Pattern
🔍 Chart Overview
The daily price action of Silver (XAG/USD) clearly displays a Double Top pattern, indicating a potential bearish reversal after an extended bullish run. The pattern structure is well-defined, supported by historical resistance, and price behavior is now aligning with a possible trend shift to the downside.
📐 Chart Pattern Analysis – Double Top
A Double Top is a reversal chart pattern that forms after an asset reaches a high price two times consecutively with a moderate decline between the two peaks. This pattern typically signals that upward momentum is weakening.
✅ Structure:
Top 1: The first peak occurred around the $35.00–$35.50 resistance level — after a strong bullish trend.
Retracement: Price pulled back to a support area around $30.00, establishing a neckline for the pattern.
Top 2: A second peak failed to surpass or even reach the height of Top 1 — confirming buyer weakness.
Breakdown: The price broke below the neckline ($30.00), confirming the double top and initiating the bearish leg.
🔲 Key Price Zones
Level Type Price Area Description
🔼 Resistance $35.00 – $35.50 Strong supply zone, formed both Top 1 and Top 2
🔽 Support / Neckline ~$30.00 Major horizontal support; now broken and being retested
🎯 TP (Take Profit) ~$29.50 (TP1), $26.64 (TP2) TP1 is minor support; TP2 is the projected move based on pattern height
⛔ SL (Stop Loss) $35.72 Above Top 2; invalidates the bearish thesis
📉 Bearish Trading Setup
With the neckline broken and the price currently pulling back for a potential retest, a sell opportunity emerges with a defined risk-reward profile.
🎯 Entry Plan:
Primary Entry: Near current levels (~$32.00) after rejection from the broken support now acting as resistance.
Confirmation Entry: If price starts forming bearish engulfing or rejection candles at ~$32.50–33.00 area.
🧮 Target Zones:
TP1: $29.50 (minor support; short-term traders may exit here)
TP2 (Final Target): $26.64 (measured move from the pattern — height from top to neckline projected down)
🛡️ Stop Loss:
Placed above Top 2 at $35.72, which invalidates the double top setup if broken.
⚖️ Risk-to-Reward Ratio
Example calculation:
Entry: $32.00
SL: $35.72
TP1: $29.50 → ~250 pip profit vs ~370 pip risk
TP2: $26.64 → ~536 pip profit vs ~370 pip risk
✅ R:R to TP1 ≈ 1:0.7
✅ R:R to TP2 ≈ 1:1.45 — acceptable to good for swing trades
🔄 Scenario Planning
📈 Bullish Invalidations:
If price breaks above $35.72, the double top is invalidated.
A new bullish structure could emerge targeting $37.00–$38.50.
📉 Bearish Continuation:
If price confirms resistance at the neckline, a sustained drop could occur.
Watch for lower highs and strong bearish candles to confirm continuation.
🧠 Analyst Insights
This is a textbook Double Top scenario — one of the most reliable reversal patterns in technical analysis.
Price action, key horizontal levels, and trendline structure all support the bearish thesis.
Monitor macroeconomic factors like USD strength, inflation trends, and commodities sentiment as catalysts.
🔍 Chart Overview
The daily price action of Silver (XAG/USD) clearly displays a Double Top pattern, indicating a potential bearish reversal after an extended bullish run. The pattern structure is well-defined, supported by historical resistance, and price behavior is now aligning with a possible trend shift to the downside.
📐 Chart Pattern Analysis – Double Top
A Double Top is a reversal chart pattern that forms after an asset reaches a high price two times consecutively with a moderate decline between the two peaks. This pattern typically signals that upward momentum is weakening.
✅ Structure:
Top 1: The first peak occurred around the $35.00–$35.50 resistance level — after a strong bullish trend.
Retracement: Price pulled back to a support area around $30.00, establishing a neckline for the pattern.
Top 2: A second peak failed to surpass or even reach the height of Top 1 — confirming buyer weakness.
Breakdown: The price broke below the neckline ($30.00), confirming the double top and initiating the bearish leg.
🔲 Key Price Zones
Level Type Price Area Description
🔼 Resistance $35.00 – $35.50 Strong supply zone, formed both Top 1 and Top 2
🔽 Support / Neckline ~$30.00 Major horizontal support; now broken and being retested
🎯 TP (Take Profit) ~$29.50 (TP1), $26.64 (TP2) TP1 is minor support; TP2 is the projected move based on pattern height
⛔ SL (Stop Loss) $35.72 Above Top 2; invalidates the bearish thesis
📉 Bearish Trading Setup
With the neckline broken and the price currently pulling back for a potential retest, a sell opportunity emerges with a defined risk-reward profile.
🎯 Entry Plan:
Primary Entry: Near current levels (~$32.00) after rejection from the broken support now acting as resistance.
Confirmation Entry: If price starts forming bearish engulfing or rejection candles at ~$32.50–33.00 area.
🧮 Target Zones:
TP1: $29.50 (minor support; short-term traders may exit here)
TP2 (Final Target): $26.64 (measured move from the pattern — height from top to neckline projected down)
🛡️ Stop Loss:
Placed above Top 2 at $35.72, which invalidates the double top setup if broken.
⚖️ Risk-to-Reward Ratio
Example calculation:
Entry: $32.00
SL: $35.72
TP1: $29.50 → ~250 pip profit vs ~370 pip risk
TP2: $26.64 → ~536 pip profit vs ~370 pip risk
✅ R:R to TP1 ≈ 1:0.7
✅ R:R to TP2 ≈ 1:1.45 — acceptable to good for swing trades
🔄 Scenario Planning
📈 Bullish Invalidations:
If price breaks above $35.72, the double top is invalidated.
A new bullish structure could emerge targeting $37.00–$38.50.
📉 Bearish Continuation:
If price confirms resistance at the neckline, a sustained drop could occur.
Watch for lower highs and strong bearish candles to confirm continuation.
🧠 Analyst Insights
This is a textbook Double Top scenario — one of the most reliable reversal patterns in technical analysis.
Price action, key horizontal levels, and trendline structure all support the bearish thesis.
Monitor macroeconomic factors like USD strength, inflation trends, and commodities sentiment as catalysts.
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Related publications
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.