Double Bottom

A Double Bottom pattern is a technical analysis charting pattern that describes a change in trend and a momentum reversal from prior leading price action. It describes the drop of a stock or index, a rebound, a drop to the same or similar level as the original drop, and finally another rebound. The double bottom looks like the letter "W". The twice-touched low is considered a support level. \/\/ Double bottoms trade well in conjunction with momentum indicators, such as Stochastics. Stochastics is a fixed parameter index. It has rigid confines at +100 and -100. Since Double Bottoms occur primarily in areas of consolidation, you can use a momentum indicator such as with a Stochastics reading of -25, at which point Stochastics are indicating "oversold."

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