Horn Top: Twin Spikes That Warn of a Top

Key Takeaways

• A horn top is two unusually long upward spikes separated by one bar, best seen on weekly charts.
• It is a bearish reversal pattern that confirms when price closes below the lowest low of the three bars.
• The most common mistake is acting before that confirming close below the pattern low.
• Bulkowski's data shows a low break-even failure rate near 9% and an average decline of about 19% on weekly charts.

What It Is

The horn top is a chart pattern Tom Bulkowski identified and documented. It consists of two price spikes that poke upward, separated by a single bar between them, with all three sitting well above the surrounding price action. On a weekly chart, that middle bar represents one week between the two horns.

The spikes should be long, longer than most spikes over the prior year, and they should stand out clearly above nearby prices. The pattern is a short-term bearish reversal that appears at the top of an uptrend. Bulkowski notes the horn top performs best on the weekly time frame.

The Intuition

Two tall spikes close together show that buyers twice pushed price sharply higher, and twice failed to hold the gains. The single bar between the horns is a brief pause that fails to extend the advance.

That repeated rejection at a high level signals that demand is running out. The first spike attracts profit-taking, the second confirms that the new highs cannot stick, and the failure to make progress between them reveals exhaustion. When price then breaks below the pattern, the sellers who were waiting take control and the reversal begins.

How the Horn Top Pattern Works

The structure is compact and easy to define once you know what to look for:

Bar 1: tall upward spike
Bar 2: a single separating bar (one week on a weekly chart)
Bar 3: a second tall upward spike near the first

Both spikes should be unusually long relative to the past year, and they should appear above the surrounding price landscape. The pattern confirms only when price closes below the lowest low of the three-bar formation. Until that close, the horns are just two spikes, not a confirmed top.

Bulkowski provides a measure rule for the target. Take the height from the highest high of the pattern to the lowest low, multiply by the percentage that historically reaches the target, then subtract from the lowest low:

Target = Lowest low - (Highest high - Lowest low) x 54%

His weekly statistics, drawn from hundreds of cases, show a break-even failure rate around 9% and an average decline of roughly 19% once confirmed, with about 54% of cases reaching the full measured target. Those are historical tendencies across many stocks, not guarantees for any single trade, so a stop remains essential.

Worked Example

A stock rallies for months and reaches new highs on a weekly chart. One week it spikes up to 50, the next week pulls back to a high of 46, and the following week spikes again to 49. The two spikes at 50 and 49 stand well above the surrounding weeks, with a single separating bar between them, forming a horn top. The lowest low across the three weeks is 44.

The pattern confirms when price later closes below 44. Using the measure rule, the height from the 50 high to the 44 low is 6 points. Multiplying by 54% gives about 3.2, so the target is 44 minus 3.2, or roughly 40.8. A trader acting on the confirmed break might use the 50 pattern high as a stop reference.

Common Mistakes

1. Entering before confirmation. The pattern is not valid until price closes below the lowest low of the three bars. Two spikes alone do not confirm a top.
2. Using spikes that are too small. The horns must be unusually long compared with the past year. Ordinary spikes do not qualify.
3. Applying it on the wrong time frame. Bulkowski found the horn top works best on weekly charts. Forcing it on short intraday charts weakens the signal.
4. Skipping the stop. Even with a low failure rate, some horn tops fail. A stop above the pattern high protects against a continued uptrend.
5. Treating the statistics as certainties. The 9% failure and 19% decline figures are sample averages. Any single setup can behave differently.

Frequently Asked Questions

What is a horn top pattern in simple terms? It is two tall upward price spikes sitting close together with one bar between them, usually on a weekly chart. It warns that an uptrend may be about to turn down.

How does a horn top pattern affect investment decisions? A confirmed horn top can signal a time to exit longs or consider a short, with a measured target below the pattern and a stop above the spike highs. It works best after a long advance.

What is a real-world example of a horn top? A stock spiking to 50 one week, pulling back, then spiking to 49 two weeks later, with both spikes well above nearby prices, forms a horn top once price closes below the pattern low.

How can investors use the horn top pattern effectively? Look for it on weekly charts, require both spikes to be unusually long, wait for a close below the lowest low to confirm, apply the measure rule for the target, and set a stop above the spikes.

How is a horn top different from a double top? A horn top is two tall spikes separated by just one bar, a tight formation. A double top is two peaks at a similar level usually separated by a wider valley, and it confirms on a break below that valley.

Sources

1. Bulkowski. "Horn Tops." https://thepatternsite.com/hornt.html
2. Bulkowski. "Pattern Index." https://thepatternsite.com/chartpatterns.html
3. Bulkowski. "Visual Index of Chart Patterns." https://thepatternsite.com/visualcpindex.html
4. Bulkowski, T.N. Encyclopedia of Chart Patterns. Wiley. https://thepatternsite.com/PatternReview4.html

Disclaimer

This article is educational content only and is not financial advice. Nothing here is a recommendation to buy, sell, or hold any security. Consult a licensed advisor before making investment decisions.