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A double bottom is a chart pattern created when a stock makes a low, rebounds, then retests the same low and rebounds once again. A double bottom chart pattern resembles a "W". A double bottom chart pattern has great significance for a chartist or technical analyst. To a technical analyst the double bottom formation implies that a stock has hit an important support level and is having trouble going lower. For a technical analyst a double bottom chart pattern may indicate that a stock has made a low and is now poised for an upward move. However, a break below the support line created by a double bottom pattern is considered extremely bullish. Double bottom chart patterns can be found on intra-day charts, daily, weekly, monthly, yearly and even longer-term charts. The opposite of a double bottom chart pattern is a double top pattern. |
