What Does a Double Bottoms Chart Pattern Mean?

Double bottoms stocks pattern is a reversal pattern that forms after an extended downward stock trend.

Double bottoms stocks trading pattern is made up of two consecutive troughs that are roughly equal, with a moderate peak that is in between the two troughs.

The buy signal from this double bottoms chart pattern market bottoming out stocks signal occurs when the stocks market breaks-out the neckline to the upside.

In Stocks, the double bottoms chart pattern is an early warning stocks signal that the bearish stock trend is about to reverse.

Double Bottom Pattern is only considered complete/confirmed once the neck-line is broken.

In this double bottoms chart patterns formation the neckline is the resistance level for the stocks price. Once this resistance is broken the stocks market will move up.

Summary:

• Double bottom stocks pattern forms after an extended move downwards - stocks downward trend
• This Double bottoms stocks pattern formation indicates that there will be a reversal in the stocks market
• We buy when price breaks-out above neckline: as described on the stocks example illustrated and explained below.

What Does a Double Bottoms Pattern Mean?

The double bottoms chart pattern look like a W Shape stocks chart pattern, the best reversal stock signal is where the second bottom is higher than the first bottom as shown below.

This means that the reversal stocks signal from the double bottoms pattern can be confirmed by drawing an upward stocks trend line as shown below. If a trader opens a buy trading signal the stop loss will be placed just below this upward trend line.

What Does a Double Bottom Chart Pattern Mean? - What Happens To Stocks Price Action After a Double Bottoms Chart Pattern in Stocks