Price Patterns - Multiple Tops End Badly

After making repeated efforts to break above a resistance level, many stocks head to the downside. Double tops occur frequently and occasionally you'll see a triple top. But Deluxe (DLX), a printer of checks, provides a unique topping pattern as it made five attempts over three years to break out above the low $40 range. Unable to do so, the stock price collapsed due to a series of earnings disappointments. A multiple top usually signals an eventual move to the downside.

Posted July 5, 2006.