Learn How To Read Tweezer Top & Bottom Candlestick Charts With This Useful How-To

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If you want to learn what Tweezer Top and Bottom candlesticks are and how they are used by traders to identify shifts in the market, this is the guide.

We explore the relationship between tweezer top and tweezer bottom candlesticks, how you can find these formations on a chart, and how these indicate directional movement.

We also include a list of resources to other candlestick technical analysis tools at the end of the guide.

What Are Tweezer Candlestick Patterns?

There are several variations of the tweezer candlestick formation.

The Tweezer Top formation is viewed as a bearish reversal pattern is seen at the top of uptrends and the Tweezer Bottom formation is viewed as a bullish reversal pattern seen at the bottom of downtrends.

Tweezer Top and Bottom Candlestick pattern

Tweezer Top formation consists of two candlesticks:

  • Bullish Candle (Day 1)
  • Bearish Candle (Day 2)

Tweezer Bottom formation consists of two candlesticks:

  • Bearish Candle (Day 1)
  • Bullish Candle (Day 2)

Sometimes Tweezer Tops or Bottoms have three candlesticks.

When Does The Bearish Tweezer Top Show?

A bearish Tweezer Top occurs during an uptrend when bulls take prices higher, often closing the day off near the highs (typically a strong bullish sign).

However, on the second day in the above example, how traders feel (i.e. their sentiment) reverses completely. The market opens and goes straight down, often eliminating the entire gains of Day 1.

When Does The Bullish Tweezer Bottom Show?

The reverse, a bullish Tweezer Bottom occurs during a downtrend when bears continue to take prices lower, usually closing the day near the lows (typically a strong bearish sign).

If you already understand tweezer top and bottom formations, you can find commodities to practice it with on free broker demo accounts. See our commodity guides on precious metals, energy commodities, and agricultural assets to choose a practice instrument.

Nevertheless, Day 2 is the complete opposite because prices open and go nowhere but upwards. This bullish advance on Day 2 sometimes eliminates all losses from the previous day.

How To Interpret Tweezer Candlesticks On A Chart

A Tweezer Bottom is shown below in the chart of Exxon-Mobil (XOM) stock:

Tweezer Bottom Candlestick Chart

The bears pushed the price of Exxon-Mobil (XOM) downwards on Day 1.

However, the market on Day 2 opened where prices closed on Day 1 and went straight up, reversing the losses of Day 2.

A potential buy signal might be given on the day after the Tweezer Bottom, if there were other confirming signals.

How Does A Tweezer Bottom Form?

The bullish Tweezer Bottom formation shown on the last page of the daily chart of Exxon-Mobil is shown below with a 15-minute chart spanning the two days the Tweezer Bottom pattern was emerging:

Tweezer Bottom Intra-day Candlestick pattern

Notice how Exxon-Mobil (XOM) stock went downwards the whole day on Day 1. Then on Day 2, the bearish sentiment of Day 1 was completely reversed and XOM stock went up the whole day.

This sudden and drastic change of opinion between Day 1 and Day 2 could be viewed as an overnight transfer of power from bears to bulls.

How Does A Tweezer Top Pattern Form?

The 15-minute chart below of the E-mini Russell 2000 Futures contract shows how a three day Tweezer Top usually develops:

Tweezer Top Candlestick pattern acting as resistance
  • On Day 1, the bulls were in charge of the Russell 2000 E-mini.
  • On Day 2, however, the bulls began the day trying to make a new high but were rejected by the overhead resistance created by the prior day’s highs. The market then sank quickly only to recover halfway by the end of the close on Day 2.
  • Day 3 opened with a spectacular gap up, but the bulls were promptly rejected by the bears at the now established resistance line.

Are There Other Tweezer Formations?

The Russell 2000 E-mini then fell for the rest of the day. Many classic chartists will recognize this triple Tweezer Top as a Double Top formation.

The Tweezer Top and Bottom reversal pattern can visually indicate a transfer of power and sentiment from the bulls and the bears.

Of course other technical indicators should be consulted before making a buy or sell signal based on the Tweezer patterns.

Please note, this is an example trade – not a recommendation.

Where Can I Start Trading With Tweezer Patterns?

If you are interested in trading using technical analysis, have a look at our reviews of these regulated brokers available in to learn which charting tools they offer:

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. <b>Between 74%-89% of retail investor accounts lose money when trading CFDs.</b> You should consider whether you can afford to take the high risk of losing your money.

Further Reading

Learn more about technical analysis charting concepts and strategies including Typical Price Moving Average,  and Average Directional Movement, and Triangular Moving Average.

For other candlestick analysis tools, see our guides on:

Also, see our guide to understanding options trading strategies, and other guides on instruments like:

FAQs

What is a tweezer bottom candlestick?

The tweezer bottom candlestick is a pattern that occurs on a candlestick chart of a financial instrument (like a stock or commodity). It consists of two candlesticks and indicates a bullish reversal in a chart. The first candlestick indicates a bearish trend in the first time-frame, and the other indicates a bullish move in the second time frame.

What is a tweezer top candlestick?

The tweezer top candlestick is a bearish pattern made of two candlesticks in a chart. Unlike the bullish tweezer bottom, the tweezer top formation’s first candlestick shows a potential bullish trend that tops out without a wick. This bullish candlestick is followed by an immediate downtrend with a wick and the bottom of the candlestick.

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