Horn Tops
3 min read
Core idea
A horn top is the bearish mirror of a horn bottom: two unusually tall upward price spikes separated by one quieter week on the weekly chart. The pattern marks an end of an uptrend, with confirmation occurring when price closes below the lowest low of the three-week pattern.
The pattern is rare — especially in bear markets (perhaps because bear markets are short) — but Bulkowski ranks it first for performance among the (few) weekly-scale patterns he benchmarks. Most horn tops form less than two months before a major turn, which makes them genuinely useful as an early-warning signal even when you don't trade them.
Why it matters
If you own a stock and a clean horn top appears, treat it as a warning bell, not a sell trigger. Most horns precede a major decline by under two months. Even if you decide the pattern doesn't quite meet your trading criteria, tighten stops, scale out, and watch the news.
Confirmation matters more than the spikes
The two spikes are necessary but not sufficient. The pattern only confirms when price closes below the lowest low of the three-week window. Without confirmation, you have two tall up-spikes — which often happens at strong highs and resolves with a continuation, not a top.
The "nothing to reverse" gotcha
Horn tops appearing right after an extended downtrend (where price has only just bounced) tend to fail. There's nothing for the pattern to reverse — price already declined. Look for horns appearing after a sustained uptrend or as the right shoulder of a larger top complex.
Key takeaways
Mental model
Practical application
A position-protection routine
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Switch to weekly view on every long position monthly. Watch for two consecutive tall upward spikes.
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Compare the spikes against the past 12 months. If similar-height up spikes are common in this stock, the signal is weak.
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Identify the three-week low. That's your trigger line.
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If price closes below the trigger, initiate the exit plan: scale out of a long, or open a short with a stop above the higher of the two spikes.
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Sanity-check the context. Has the stock been trending up for months? Good. Did the prior six months show a major decline that the spikes are bouncing from? Skip — the pattern's likely to fail.
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Stop discipline: placing the stop at the lower of the two spike tops keeps the trade tight; at the bottom of the pattern, looser. Bulkowski's stop tables show roughly two-thirds of patterns hit the pattern-bottom stop somewhere on the journey.
Example
A tech stock has run from $40 to $72 over six months. On the weekly chart you spot:
- Week 1: high $76, close $73, volume 1.7× average.
- Week 2: shallower week, high $73, close $72.
- Week 3: high $75.50, close $72, volume 1.6× average.
The three-week low is $71. Two weeks later, price closes at $70.40 — confirmation. You exit your long at $70 or short with a stop at $76.20. Over the next ten weeks, price slides to $58 — a 17% decline. That's right in line with Bulkowski's average horn-top decline.
Compare with a failure case: same three-week shape, but the stock has just bounced from a six-month decline. The spikes form during a relief rally. Price kisses the trigger but never closes below — and within four weeks resumes lower in a continuation, not a reversal. Same pattern shape, wrong context, no trade.
Related lessons
Related concepts
- Reversal Patternslinked concept
- Price Spikelinked concept
- Support and Resistancelinked concept
- Volume Analysislinked concept