What characterizes an Adam top or bottom?

An Adam top or bottom is characterized by a sharp pointed shape. This pattern is defined by the formation of a peak (for an Adam top) or a trough (for an Adam bottom) that appears relatively steep, resembling a sharply defined point.

In the case of an Adam top, the price action leads up to a peak, followed by a decline, indicating that a reversal from an uptrend to a downtrend may be taking place. Conversely, the Adam bottom signals a reversal from a downtrend to an uptrend, starting with a decline leading to a sharp point before the price rises.

The distinction between the Adam formation and other patterns, such as rounded shapes or V-shaped points, lies in its abrupt nature. Rounded tops or bottoms develop gradually and suggest a more prolonged consolidation phase, while V-shaped formations indicate a swift change in direction but with less emphasis on a pointed peak or trough. The horizontal trend option does not apply since the Adam formations are characterized by significant price movements that culminate in sharp points reflecting trend reversals.