What does a double bottom mean?

Double bottom patterns occur relatively often and in many different timeframes. A daily double bottom may indicate a longer-term reversal or shift in trend, while an hourly double bottom may signal only a brief pause in a down trend. What Does a Double Bottom Tell You?

What is a double bottom reversal?

Although there can be variations, the classic Double Bottom Reversal usually marks an intermediate or long-term change in trend. Many potential Double Bottom Reversals can form during a downtrend, but until key resistance is broken, a reversal cannot be confirmed.

How to find a double bottom pattern?

Look for two noticeable lowest price points on a chart with a similar height and width; The distance between the two bottoms – the two lows – shouldn’t be too brief, but this depends on your chosen trading time frame; To confirm a double bottom pattern, use other technical indicators like moving averages (MA) or oscillators ;

Why does double bottom charting matter?

Why It Matters. If accurately identified, the double bottom charting pattern can signal a fortuitous entry point for smart investors. To chartists, the double bottom formation indicates that the stock has reached a crucial support level and is encountering difficulty moving lower.