How Meta's Double Top Turned Into a Reversal Buy Signal on the 4H Chart
Meta Platforms Inc. (META) recently formed a classic double top pattern, which is often interpreted as a bearish reversal signal.
The price touched a key resistance level twice and then pulled back, triggering caution among technical traders. However, the
stochastic RSI on the 4-hour timeframe is now flashing a potential reversal buy signal that could shift market sentiment.
This hidden momentum may catch short sellers off guard. Here’s a breakdown of the setup:
Technical Breakdown
1. Double top formation
2. Stochastic RSI buy signal on the 4H chart
3. Support is holding
Strategy Outlook: Contrarian Reversal Play
While the double top suggests weakness, the stochastic RSI indicates a rebound. Traders may be witnessing a bear trap, where the market tempts sellers before reversing higher.
If the price moves above both the 50 EMA and 200 EMA on the 4-hour chart, it could trigger what some i call a rocket booster setup—strong upside momentum backed by moving average alignment.
A bullish confirmation candle with volume could solidify the reversal case.
Conclusion
Meta’s chart pattern might look bearish at first glance, but momentum indicators tell a different story. A reversal from here could lead to a breakout if bulls step in with strong follow-through.
Disclaimer: Trading is risky. Use a simulation trading account before you trade with real money and learn risk management and profit-taking strategies.
---
Meta Platforms Inc. (META) recently formed a classic double top pattern, which is often interpreted as a bearish reversal signal.
The price touched a key resistance level twice and then pulled back, triggering caution among technical traders. However, the
stochastic RSI on the 4-hour timeframe is now flashing a potential reversal buy signal that could shift market sentiment.
This hidden momentum may catch short sellers off guard. Here’s a breakdown of the setup:
Technical Breakdown
1. Double top formation
- Resistance was tested two times, forming a temporary ceiling.
- Typically, this signals a possible trend reversal.
- However, there has been no strong bearish follow-through after the second top.
2. Stochastic RSI buy signal on the 4H chart
- The %K line has crossed above the %D line in oversold territory.
- This suggests a potential bullish reversal.
- RSI is also recovering from a low zone, pointing to increasing buying pressure.
3. Support is holding
- The neckline of the double top remains unbroken.
- Price action shows higher lows forming just below resistance, a bullish sign.
Strategy Outlook: Contrarian Reversal Play
While the double top suggests weakness, the stochastic RSI indicates a rebound. Traders may be witnessing a bear trap, where the market tempts sellers before reversing higher.
If the price moves above both the 50 EMA and 200 EMA on the 4-hour chart, it could trigger what some i call a rocket booster setup—strong upside momentum backed by moving average alignment.
A bullish confirmation candle with volume could solidify the reversal case.
Conclusion
Meta’s chart pattern might look bearish at first glance, but momentum indicators tell a different story. A reversal from here could lead to a breakout if bulls step in with strong follow-through.
Disclaimer: Trading is risky. Use a simulation trading account before you trade with real money and learn risk management and profit-taking strategies.
---
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.
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.