Double-bottom patterns?

Technical analysis uses a double bottom pattern to indicate a change in trend and momentum from prior leading price action.

It depicts a stock or index's decline, recovery, reversal, and rebound.

"W"-shaped double bottom. Twice-touched lows are support levels.

Double Bottom Interpretation?

Most technical analysts expect the initial bottom to rise 10–20%. The second bottom should form within 3–4% points of the previous low, and the rally volume should rise.

Like many chart patterns, a double bottom pattern is best utilized to analyze a market's intermediate- to long-term tendencies.

Distance between a chart pattern's lows boosts its effectiveness.

To succeed, the double bottom pattern's lows should be at least three months lengthy.

Thus, daily or weekly price charts are best for finding this market trend.

Intraday price charts can show the double bottom pattern, but it's hard to tell if it's real.

A double bottom pattern always follows a significant or minor slump in an investment, signaling the end of the trend and the start of an upswing.

Thus, market fundamentals for the security, sector, market, and other variables should support the pattern.

Fundamentals should indicate a market reversal. As the pattern develops, monitor loudness.

The pattern's two uptrends usually enhance volume. Volume rises confirm a double bottom pattern and indicate rising price pressure.

Once the closing price is in the second rebound and getting close to the high of the first rebound, and a discernible increase in volume is currently coupled with fundamentals that indicate market conditions that are conducive to a reversal, a long position should be taken with a stop loss at the second low in the pattern.

Set a profit aim double the stop loss above the entry price.

Double Bottoms vs. Double Tops

Double top patterns reverse double bottom patterns. Two consecutive rounded tops form a double top design. Inverted U pattern from initial rounding top.

After a long bullish run, rounding tops sometimes signal a bearish reversal. Double tops yield similar results.

In a double top, the second rounded top usually peaks lower than the first, indicating resistance and fatigue.

Double peaks, albeit rare, sometimes indicate investors seeking to cash in on a bullish trend.

Double tops often lead to a negative reversal where traders might profit by selling the stock.